Quickly after finalizing its acquisition of Cholula Hot Sauce®, McCormick recently announced another strategic purchase. The company has acquired 100 percent of the shares of FONA International and some of its affiliates. McCormick has acquired the business for $710 million in cash.
"The acquisition of FONA reinforces McCormick's global growth strategy as FONA expands the breadth of our flavor solutions segment into attractive categories, as well as extends our technology platform and strengthens our capabilities,” Lawrence E. Kurzius, Chairman, President, and Chief Executive Officer of McCormick, said. “This acquisition also accelerates the strategic migration of our portfolio to more value-added and technically insulated products and thus, is expected to be accretive to gross margin. FONA's portfolio is highly complementary to McCormick's and will provide our customers with an even more comprehensive product offering to meet the growing demand for clean and flavorful eating, drinking, and nutrition experiences.”
FONA's annual sales are approximately $114 million and are expected to grow. The company is a leading independent manufacturer of flavors, with a focus on nutritional and natural products and a well-recognized brand that McCormick plans to retain. The business is headquartered in Illinois and has approximately 220 employees with a state-of-the art manufacturing and technical innovation center.
"FONA is well known in the market, in part because of its strong customer engagement platform, talented employees, and investments in its future, which have driven growth for both FONA and its customers," Kurzius added. "FONA will be the cornerstone for accelerating McCormick's flavor platform in the Americas. With our passion for flavor, focus on insight-driven innovation, and differentiated customer engagement, we look forward to continuing and building upon the legacy created by the Slawek family."
A press release explained that FONA's diverse portfolio of flavors broadens McCormick's value-added offerings with products that are highly complementary to its existing portfolio. By combining the portfolios and infrastructures, McCormick adds manufacturing capacity as well as greater scale and expects to accelerate its global flavor growth.
"The Slawek family is very proud of the customers, the employee culture, and the company we have built. We are excited to see the next generation of FONA flourish as part of McCormick,” Joseph Slawek, Founder, CEO, and Chairman of FONA International, said. “We are confident McCormick will further enable FONA's forward momentum by continuing to make investments in growth initiatives, capabilities, and people. Fueled by the power of McCormick, FONA's success will be accelerated. FONA, in turn, will be a key driver in advancing McCormick's global flavor leadership."
On top of growing its portfolio, McCormick will augment its capabilities with FONA's highly experienced research and development team and extend its technology platform with additional proprietary encapsulation methods.
"McCormick has a history of creating value through acquisitions. As we continue to build the McCormick of the future and create long-term shareholder value, we are confident this is a great strategic fit with our vision of being a leading flavor company,” Kurzius continued. “The employees of FONA share with McCormick a great history and commitment to core values and purpose, doing what is right while driving industry leading financial performance, and we look forward to welcoming them to the McCormick family. Together, we will achieve continued success.”
As the biggest brands in specialty continue to make strategic acquisitions, you can count on Deli Market News to bring you the latest.