US spice firm McCormick & Co. has agreed a deal to buy Chinese bouillon maker Wuhan Asia-Pacific Condiments Co.
The CNY900m (US$141.5m) deal will add bouillon to McCormick’s Chinese portfolio, which includes spices, seasoning blends and sauces.
McCormick said WAPC was also “strong” in central China, which it claimed fits existing business in the country, which is “particularly strong” in the coastal regions.
Chairman, president and CEO Alan Wilson said: “The addition of WAPC, extends our broad range of flavors in China with bouillon. In WAPC’s top markets, more than half of consumers use chicken bouillon each day at every meal to enhance the flavour of their food. This business is strong in central China, which fits well with McCormick’s presence in the coastal regions.”
McCormick said the deal would increase earnings per share in 2014 and be “fully accretive” in 2015. It expects the transaction multiple to be 12 times EBITDA.
WAPC has annual sales of around CNY730m, McCormick said. Between 2007 and 2011, the company’s sales have increased at a compound annual rate of 25%. McCormick said it expects annual sales growth of at least 10%.