July 19 (UPI) — Spice maker McCormick & Co. Inc. has announced it will buy French’s Mustard for more than $4 billion.
The Baltimore-based company said Tuesday it will acquire the French’s, Frank’s Red Hot Sauce and Cattlemen’s brands from British food company Reckitt Benckiser.
The acquisition of French’s and “other beloved products enables McCormick to become a one-stop shop for condiment, spice and seasoning needs, providing our customers and consumers with an even more diverse and complete flavor product offering,” McCormick chairman Lawrence E. Kurzius said in a statement.
The $4.2 billion price tag is seven times the estimated sales of the unit and 25 times its forecast 2017 operating profit. Most food sector acquisitions cost considerably less.
However, the products are brands with high margins and strong growth, and were sold by Reckitt Benckiser because of the company’s recent concentration on infant nutrition, Bloomberg News said Wednesday.
McCormick also has a stronger distribution network in the United States than does Reckitt Benckiser.
The transaction still requires regulatory approval, and is expected to close later this year.
