Condiments and seasonings manufacturer McCormick & Company Inc. has wrapped up its acquisition of the iconic Mexican hot sauce brand Cholula from L Catterton, the company announced in a November 30 release. The transaction is priced at $800 million.
“We are very excited about the acquisition of Cholula as it reinforces our overarching focus on growth and creating long-term shareholder value,” Lawrence E. Kurzius, chairman, president, and chief executive officer of McCormick, said in a statement. “Cholula is a great strategic addition accelerating our condiment growth opportunities with a complementary authentic Mexican flavor hot sauce. The talented employees of Cholula have built a strong foundation, and when combined with McCormick’s operational expertise and infrastructure, we plan to drive further growth of this iconic brand.”
The company is using cash on hand and commercial paper in the transaction and expects costs related to the deal to dilute earnings per share in the fiscal years of 2020 and 2021.
Further information on the potential financial impacts of the transaction will be presented in McCormick’s fourth quarter earnings call in January 2021.
McCormick revealed plans to expand its capacity and workforce in its Q2 2020 Earnings Call on June 25. The CEO said that McCormick has focused its capital investments on boosting its capacity and capabilities in Asia, but the company will shift its resources this year to facilities in Western Europe and the US.