Value-added spices and flavor solutions provider McCormick & Co. Inc. (MKC) said Monday it has agreed to acquire Wuhan Asia-Pacific Condiments Co. Ltd. or WAPC, a privately held firm in central China, for 900 million renminbi or about $141 million, in a bid to expand its offerings of flavor products in the most populous nation. Sparks, Maryland-based McCormick expects the acquisition to increase earnings per share in 2014 and be fully accretive in 2015, once integration is completed.
In 2013, McCormick expects a slightly dilutive impact to earnings per share due to integration costs, and an estimated $4 million in costs related to the completion of the deal. The transaction is expected to occur in mid-2013, subject to regulatory approval.
Commenting on the deal, McCormick CEO Alan Wilson said, "... with the addition of WAPC's business and acquisitions completed in the past 12 months, we expect approximately 15% of 2013 sales to come from emerging markets, a significant increase from 10% in 2011. We are well on our way toward achieving our 2015 goal to have 20% of sales in emerging markets."
Founded in 1998, Wuhan is known for brands such as DaQiao and ChuShiLe bouillon products that have good patronage in the central region of China. The company has annual sales of about $115 million.
According to McCormick, the business has grown at a 25 percent compound annual rate from 2007 to 2011 and expects to clock growth of at least 10 percent.
Wuhan employs about 900 employees and has a manufacturing facility located in Wuhan, China and a network of distributors that serves traditional markets as well as modern grocery stores.
MKC is trading at $60.38, up 0.43%.
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