Spices, seasonings and flavourings group McCormick & Co has signed a definitive agreement to acquire the Asian foods specialist Epicurean International for US$97m in cash.
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The purchase price is approximately 11 times 2005 EBITDA (earnings before interest, tax, depreciation and amortisation), and is to be financed through cash from operations and short-term credit facilities, McCormick said.
McCormick said it expected the acquisition to be accretive to its earnings and contribute to it achieving its 8% to 10% earnings per share growth target.
Under the Thai Kitchen and Simply Asia brands, Epicurean imports and markets authentic, easy-to-prepare Asian foods. The company generates annual revenues of around US$50m, and has been recording compound annual revenue growth of 32% since 2002.
“A key avenue for growth at McCormick is the acquisition of leading value-added brands in high growth categories,” said McCormick’s chairman, president and CEO Robert J. Lawless. “We seek acquisitions that complement our established leadership in the development and marketing of flavours for food, with particular interest in specialty and ethnic food businesses. The acquisition of the Epicurean International assets fits squarely within this strategy. The management and employees of this business have built a rapidly growing line of on-trend, high-quality products. We look forward to working with this team to further expand the in-store penetration and consumer awareness of these products both in the US and in certain international markets.”
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