McCormick Buys Spice Company for $180M
NEW ORLEANS (AP) _ Zatarain’s, a line of spices and mixes for Louisiana-style food such as jambalaya and gumbo, was sold Thursday to spice giant McCormick & Company Inc. for $180 million in cash.
McCormick, based in Sparks, Md., is buying Zatarain’s from Citigroup Venture Capital and other investors.
The deal fits McCormick’s plan to acquire leading spice brands in regional markets, said McCormick president Robert J. Lawless.
Zatarain’s is focused on New Orleans-style cuisine. It markets flavored rice and dinner mixes, products to prepare and season seafood and other spices and flavorings. The company’s sales have jumped at least 15 percent annually for each of the past five years.
McCormick said it expected Zatarain’s will add $45 million to McCormick’s net sales for 2003 and 1 to 2 cents per share in earnings.
Zatarain’s has its primary manufacturing plant in the New Orleans suburb of Gretna and employs 270 workers. Plans call for that facility to continue operations, said McCormick spokesman Mack Barrett.
McCormick said it expected the acquisition to be completed next month. The company said it would use operational cash and short-term credit facilities to pay for the buyout.
Zatarain’s traces its roots to 1889 when Emile A. Zatarain Sr. started marketing root beer under the company name Pa-Poose Products. Shortly afterward, he began to produce mustards, pickled vegetables and eventually branched into spices.
The company has operated under several other names, including E.A. Zatarain & Sons and Zatarain’s Pure Food Products. Following the family’s sale of the business in 1963, it was moved from New Orleans to Gretna.
The current ownership of Zatarain’s acquired the company in 1993, two years after the start of a major expansion of its products into markets outside of Louisiana.
Zatarain’s currently markets over 200 food products, such as rice and pasta dinner mixes, seafood boils and stuffing mixes.
McCormick, which employs 9,000, was founded the same year at Zatarain’s. The company reported sales in 2002 of $2.3 billion.
In afternoon tradiong on the New York Stock Exchange, McCormick shares were up 3 cents at $24.78.
On the Net:
McCormick & Company Inc.: http://www.mccormick.com