Tapatio, the US-based hot sauce brand, has been acquired by private-equity firm Highlander Partners.
The founding Saavedra family retains a minority stake in the business. US investor The Arnold Companies is taking a “significant” minority shareholding in Tapatio, a statement announcing the deal said. Financial details were not revealed.
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Tapatio said Highlander’s backing will support its efforts to broaden distribution.
In the statement, it was said Tapatio intends to use the investment to step up product development and move into “complementary” new product areas.
Jeff Partridge, a partner at Highlander, said: “We share the Saavedra family’s vision to maintain the brand’s legacy as we carefully and purposefully target opportunities to grow the brand geographically, introduce new flavours and products, and deepen penetration in both the retail and foodservice channels.”
Tapatio was founded by Jose-Luis Saavedra Sr. in 1971. In addition to hot sauces, the company also offers Tapatio-flavoured snacks like Doritos and Cheetos through a long-standing collaboration with Frito-Lay.
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By GlobalDataIts products are certified gluten-free. Luis Saavedra Jr., the former CEO for Tapatio, said: “Highlander is a perfect fit given their extensive background in the branded Hispanic food category and we are pleased to have a partner that invests their own capital and takes a long-term strategic approach to growing companies.”
The acquisition is another sign of private-equity interest in US condiment brands.
In January last year, Advent International struck a deal to acquire Sauer Brands, the owner of Duke’s Mayo, from Falfurrias Capital Partners.
The companies did not disclose the financial terms of the deal, but Bloomberg, citing sources close to the matter, reported the transaction values Sauer Brands at approximately $1.5bn.
As part of that deal, Advent also agreed to acquire brands including Mateo’s Gourmet Salsa and Kernel Season’s popcorn seasoning.
Meanwhile, in July, US importer and distributor Vilore Foods snapped up Mexican-style food business Tia Lupita Foods. Founded by Hector Saldivar in 2016, California-based Tia Lupita Foods markets gluten-free, non-GMO and preservative-free products, including hot sauces and grain-free tortilla chips.
