McCormick & Co. signed an agreement to acquire One World Foods, a deal that will see it take control of premium US BBQ sauce brand Stubb's, for around US$100m in cash.
One World Foods, a privately-held company based in Austin, Texas, manufactures Stubb's craft marinates, rubs and skillet sauces. McCormick said that, following completion, it intends to maintain the headquarters of the business in Texas.
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One World Foods sales are expected to total $30m in 2015 and the company saw growth in excess of 20% in 2013 and 2014, McCormick revealed.
McCormick said it anticipates the Stubb's brand will grow at a double-digit rate for the "next several years". The flavours giant said it will drive sales through expanded distribution, increased household penetration and innovation.
Alan Wilson, McCormick chairman and CEO, commented: "Stubb's is an authentic, craft brand with an enthusiastic and loyal consumer base. Through marketing and innovation, we intend to build this base, increase household penetration and expand retail distribution in the US and internationally."
The company said it anticipates the deal to close by the end of July. The transaction remains subject to regulatory approvals. McCormick does not anticipate the deal will impact EPS this year but the company added that "strong growth" and "significant cost synergies" mean the business should generate incremental EBITDA of "at least" $10m by 2017.
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By GlobalDataMcCormick already produces a range of grilling products under the Grill Mates, Lawry's and McCormick brands.
