Seprod is letting go of one of its most popular and profitable businesses. But why and what does that mean for investors?

Seprod has sold International Biscuits, the company behind brands like Butterkist and Snackables. They say it’s part of a broader strategy to strengthen the balance sheet and focus on core operations.

International Biscuits generated about $1.3 billion in revenue and roughly $24 million in profit in 2024. That means it was profitable, but relatively small compared with the wider Seprod group.

So why sell it?

Seprod’s CEO Richard Pandohie said the company spent the last few years expanding across the Caribbean through acquisitions, AS Bryden and others. And a lot of that was financed with debt. Now the focus is on integrating those businesses and improving the company’s balance sheet.

Another issue was what the company calls “channel conflict”. Seprod operates a mill while also owning a baking business, which meant it could end up competing with some of its own customers. Selling the biscuit manufacturing operation helps remove that conflict.

But Seprod isn’t completely exiting the biscuit market. The company will still distribute Butterkist and Snackables in Jamaica under an exclusive agreement for the next five years.

For investors, there are two ways to read this.

The positive view is that Seprod is streamlining its portfolio, raising cash and reducing debt after an aggressive expansion push.

But on the other hand, the company is giving up a profitable manufacturing business. However, the sale price hasn’t been disclosed yet, which makes it harder to judge whether the deal is a strong one.

So while the move could strengthen Seprod’s balance sheet, investors will likely be watching closely to see how the numbers play out.

Seprod’s stock ended trading on Friday, March 6 at $71.76.

And that’s the bottom line.