• J.M. Smucker CEO Richard Smucker

J.M. Smucker CEO Richard Smucker (Photo : Reuters)

J.M. Smucker recently announced that it will be buying Big Heart Pet Brands for $5.8 billion. This is the first time the food manufacturer ventures into the pet food market.

While J.M Smucker is the distributor of Folgers coffee, Pillsbury, Crisco and Jif Peanut butter, Big Heart Pet owns the Meow Mix, Kibbles'n Bits, Milk-Bone and Pup-Peroni. J.M. Smucker will reportedly pay an initial payment of $5.8 million this week, according to Washington Post.

Like Us on Facebook

In 2014, Mars, the company behind M&M's and Skittles, bought pet-food companies Iams and Eukanuba for a record breaking $2.9 billion. The deal added Whiskas and Pedigree to Mars' portfolio.

According to the data released by American Pet Products Association, the pet-food market in the United States has doubled since 2000. On 2014 the market is valued at $22. A specific segment of the market that deals with "premium" pet-foods attracted more than $10 billion in market sales on 2014 alone.

About 39 percent of the estimated $59 billion pet related sales account to food, according to Reuters. Additional statistics revealed that some U.S. households even have more pets than children.

The deal between Smucker and Big Heart includes $1.3 billion to be paid in cash and addition 17.9 million shares. Big Heart is owned by Kohlberg Kravis Roberts & Co LP, Vestar Capital Partners, AlpInvest Partners Inc and Centerview Capital. After the deal with Smucker the owners share will be diluted to about 14 percent altogether.

Following the buyout, Smucker's stocks rose by 3.2 percent and values at $109.35.

J.M. Smucker CEO Richard Smucker said, "With approximately two-thirds of U.S. households having at least one family pet, we will now be able to serve the mealtime and snacking needs of the whole family."