• Arca buys US firm Wise and Ecuador's Inalesca
  • Mexican firm already owns domestic snacks business
  • Arca also number two Coke bottler in Latin America 
Arca adds to existing snacks business in Mexico

Arca adds to existing snacks business in Mexico

Mexican food and drink group Arca Continental has bolstered its snacks business with two acquisitions, including the purchase of US firm Wise Foods.

Arca owns the Bokados snack business in Mexico but is better known as Latin America's second-largest bottler for Coca-Cola Co.

However, the company yesterday (17 December) announced the acquisitions of Wise and of a snacks firm in Ecuador, Industrias Alimenticias Ecuatorianas, or Inalecsa.

Private-equity firm Palladium Equity Partners has owned Wise since 2000. Arca said the Wise brand has a "strong core market" but also has the potential to be expanded nationally. Arca said Wise was the number one regional brand in the New York Metropolitan market.

Inalecsa has two plants in Ecuador and supplies products across the country, as well as into Europe.

"The integration of Wise Foods and Inalecsa reinforces our confidence in this segment of the snack industry as an important vehicle for creating value for our shareholders, in areas that are highly complementary to our core business," Arca chairman Manuel Barragan Morales said.

Show the press release

 

Arca Continental Strengthens Its Snack Business with Two Landmark Acquisitions

Arca Continental announces the acquisitions of snack food companies Wise Foods in the United States and Inalecsa in Ecuador, both with traditional and well-known brands

These operations strengthen the profitable growth and value creation opportunities of its snack business

MONTERREY, Mexico--(BUSINESS WIRE)--Arca Continental, S.A.B. de C.V. (BMV: AC) (“the Company” or “Arca Continental”), the second-largest Coca-Cola bottler in Mexico and Latin America announced today the acquisitions of snack food companies Wise Foods (“Wise”), headquartered in Pennsylvania, and Industrias Alimenticias Ecuatorianas (“Inalecsa”) based in Ecuador. Terms of the transactions were not disclosed.

Wise Foods was purchased from affiliates of New York-based private investment firm Palladium Equity Partners, LLC that had acquired Wise in 2000. This transaction is still subject to customary regulatory approvals, which are expected to be obtained promptly.

Both Wise Foods and Inalecsa have well-recognized salty and sweet snack brands in their respective markets.

The investment in this important sector strengthens the Company’s presence in both regions and expands its snack business, which operates in Mexico under the brand Bokados, the third-largest in the country.

The combination of these two companies with our current snack operations will result in net sales of close to US$ 400 million in 2013.

“The integration of Wise Foods and Inalecsa reinforces our confidence in this segment of the snack industry as an important vehicle for creating value for our shareholders, in areas that are highly complementary to our core business,” stated Manuel L. Barragan Morales, Chairman of the Board of Directors of Arca Continental.

“These transactions also increase our Company’s presence and competitiveness in both markets, thereby enabling us to develop new growth opportunities in the territories we serve. Both provide a solid platform that will bring innovation to our portfolio, product and brand expansion as well as beneficial synergies and the sharing of best practices,” said Francisco Garza-Egloff, Chief Executive Officer of Arca Continental.

Over its 90-year history, Wise Foods is a pioneer in the potato chip and salty snack segments and has enjoyed excellent consumer loyalty, allowing it to compete successfully with larger national snack companies.

Wise is a leading regional salty snack brand with strong core market and national expansion potential. The company has a particularly strong presence in the New York Metropolitan market where Wise is the #1 regional brand and #2 overall brand.

Wise Foods is headquartered and performs manufacturing activities in Berwick, Pennsylvania. Products are distributed via a system of independent distributors and five company-owned distributor branches. It has approximately 850 employees and produces nearly 40,000 tons per year. Seale & Associates acted as financial advisor for this transaction.

The acquisition of Wise will greatly expand Arca Continental’s current operations and strengthen marketing capabilities in its related businesses in the U.S., where the Company has been operating for over 25 years, primarily in Texas and California, through its affiliate Interex.

On the other hand, Inalecsa started operations in Ecuador in 1972 and is a leading company in its industry, with a wide national footprint as well as exports to Europe. The company is known for its salty, sweet and savory snacks, with leading brands such as Inacake, Tigreton, Tortolines, Riskos and Tornaditos.

Inalecsa has two production centers in Guayaquil and Quito, with over 400 employees that produce close to 8,000 tons of products per year. HSBC acted as financial advisor in this transaction.

Arca Continental is committed to creating value within all the communities in which it operates, backed by the professionalism of its team members and the values of its corporate culture.

 

Original source: Arca Continental