(Reuters) - J M Smucker Co (>> J M Smucker Co) has agreed to buy Big Heart Pet Brands for $3.2 billion, snapping up the popular Meow Mix and Milk-Bone brands in its first venture into the fast-growing U.S. pet food market.

Smucker, known for its peanut butter, jam and Folgers coffee, is betting on rising pet ownership in the United States, a trend that has already attracted interest from investors and encouraged companies to sell up or go public.

More U.S. households have pets than children, according to the American Pet Products Association. About 39 percent of the estimated $59 billion in pet-related spending was on food last year, according to its website. (http://bit.ly/1lCH45j)

"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," Chief Executive Richard Smucker said in a statement.

Smucker said it would offer about 17.9 million shares to shareholders of Big Heart, formerly Del Monte Corp, and pay $1.3 billion in cash.

Big Heart is owned by private equity firms Kohlberg Kravis Roberts & Co LP, Vestar Capital Partners, Centerview Capital and AlpInvest Partners Inc. Together, they will own about 14 percent of Smucker after the deal.

Smucker will also assume about $2.6 billion of Big Heart's net debt, bringing the total deal value to about $5.8 billion. Smucker expects to be leveraged four times after the transaction closes by April.

Shares of Smucker rose 3.2 percent to $109.35 in extended trading.

After the deal, pet food will become Smucker's second-largest business after coffee, contributing an estimated $2.4 billion to sales in the year ending April 2016, the company said in a presentation on its website. (http://bit.ly/1zQGY3G)

By acquiring San Francisco-based Big Heart, Smucker gains ownership of the 9Lives cat food brand and Kibbles 'n Bits dog food. William Blair & Co LLC and Wachtell, Lipton, Rosen & Katz advised Smucker.

The deal follows several buyouts and stock listings in the pet food business. PetSmart Inc's (>> PetSmart, Inc.) acquisition by a consortium of private equity firms led by BC Partners was the biggest leveraged buyout of 2014.

Mars Inc bought most of Procter & Gamble Co's (>> Procter & Gamble Co) pet food business last year. Freshpet Inc floated its shares in November, while larger rival Blue Buffalo Co has hired banks for an IPO.

(Additional reporting by Manya Venkatesh in Bengaluru; Editing by Saumyadeb Chakrabarty and Joyjeet Das)

By Amrutha Gayathri

Stocks treated in this article : Procter & Gamble Co, PetSmart, Inc., J M Smucker Co