HUNT VALLEY, Md. — McCormick & Co. has completed the purchase of the parent company of Cholula Hot Sauce from L Catterton. McCormick announced the agreement to acquire Cholula on November 24, 2020.
Cholula, a premium Mexican hot sauce brand, is described as a strong addition to McCormick’s global branded flavor portfolio, broadening the company’s offering in the high growth hot sauce category to consumers and foodservice operators. McCormick funded the purchase price of $800 million, which is subject to certain customary purchase price adjustments, through a combination of cash on hand and commercial paper.
“We are very excited about the acquisition of Cholula as it reinforces our overarching focus on growth and creating long-term shareholder value,” said Lawrence Kurzius, chairman, president and chief executive officer. “Cholula is a great strategic addition accelerating our condiment growth opportunities with a complementary authentic Mexican flavor hot sauce. The talented employees of Cholula have built a strong foundation, and when combined with McCormick’s operational expertise and infrastructure, we plan to drive further growth of this iconic brand.”
McCormick said it expects transaction and integration costs to dilute earnings per share in fiscal years 2020 and 2021 and have no impact to adjusted earnings per share in both years. McCormick expects the transaction to be accretive to adjusted earnings per share in 2021. Adjusted earnings per share exclude, among other items, transaction and integration costs. The company will provide guidance for fiscal 2021, inclusive of the acquisition, on its fourth quarter earnings call in January 2021.