Apparently eager to sell more than just food items for people, condiments and coffee conglomerate J.M. Smucker (NYSE:SJM) has dived into the pet food business. The company announced last week that it bought Big Heart Pet Brands with a mix of cash and stock worth roughly $3.2 billion. Dogs and cats now have a huge reason to like Smucker, but can the same be said for its human investors?

Out of the can
The deal marries two companies that have strong portfolios in their respective businesses. J.M. Smucker is known for its eponymous line of jams, jellies, and related products, but also owns Jif peanut butter, Folgers coffee, and Crisco shortening.

Big Heart Pet Brands' better-known products include Milk-Bone dog biscuits, Kibbles 'n Bits canine treats, and Meow Mix cat food.

The latter company was once part of Del Monte Foods, a canned-fruit specialist that acquired a host of pet food brands over time. In 2011 private equity operator KKR spearheaded a buyout of Del Monte, selling the human food business in 2013 to an Asian investor. The remainder was organized into Big Heart Pet Brands.

The new pet asset
Most of the $3.2 billion purchase price won't come directly out of J.M. Smucker's wallet. KKR and its partners will receive 17.9 million Smucker shares (roughly 14% of the company), while pocketing about $1.3 billion in cash.

A larger amount Smucker will have to worry about is Big Heart's nearly $2.6 billion in net debt that it is assuming as part of the deal.

Essentially, Smucker is paying for growth. Its top line hasn't moved much in the last three fiscal years, coming in at $5.5 billion, $5.9 billion, and $5.6 billion, respectively, according to S&P Capital IQ. Net income advanced further (from $455 million to $561 across that span of time), but much of that was due to lower costs in the latter year.

Meanwhile, the overall pet food business boasted $73 billion in worldwide sales, $21 billion domestically, in 2013, according to The Wall Street Journal, and Big Heart is one of its top manufacturers. Switzerland's Nestle controls about 35% of the U.S. market, with Mars -- which bought Procter & Gamble's (NYSE:PG) pet food lines last year -- holding roughly 23%, and Big Heart in third place with 13%.

Smucker's new asset posted net sales of nearly $2.2 billion for its fiscal 2014, with operating income coming in at $255 million. Big Heart's latest annual revenue figure was almost 40% that of Smucker's, so the boost in the new owner's top line will be substantial.

The Big Heart deal also gives Smucker some much-needed diversification. The company derives nearly 50% of its sales from coffee (thanks to its $3 billion buyout of Folgers in 2008 from the eagerly divesting Procter & Gamble), and almost 20% from peanut butter and jams.

Barking their approval
The market clearly liked the Big Heart deal; after it was announced, investors bid up J.M. Smucker's stock price by about 7% to nearly $114 per share.

But that big debt load looms. At the end of its most recently reported quarter, Smucker had under $550 million in long-term debt, which is significantly less than the $2.6 billion it is inheriting from Big Heart. It will have to be aggressive in paying down its new IOUs, or risk damaging its credit profile and hence its ability to borrow at reasonable rates in the future.

Still, the company's cat-like leap into the top ranks of pet food products seems like a sensible long-term play that could nicely boost its results, assuming that debt is dealt with relatively quickly. We'll soon see if that initial investor enthusiasm is justified. Woof woof.