McCormick & Company (MKC, Financial) is an American Fortune 1000 company that manufactures condiments and flavorings for commercial, retail, and industrial markets.
In 1889, Willoughby M. McCormick started the company in Baltimore, Maryland, United States. The initial products were sold door-to-door and included fruit syrups, root beer, juices and flavoring extracts. Seven years later, McCormick ventured into the spice industry by buying F.G. Emmett Spice Company.
In 1989, McCormick moved from Baltimore to the suburb of Hunt Valley, Maryland from downtown.
McCormick's oldest and largest business, the U.S. Consumer Products Division, manufactures and sells herbs, spices, extracts, sauces, proprietary seasoning blends and marinades.
The brands included in the company are McCormick, Ducros (Europe), Zatarain's (Louisiana, United States), Old Bay Seasoning (United States), Schwartz (United Kingdom), Club House (Canada), Billy Bee Honey (Canada), Thai Kitchen and Simply Asia (United States), Aeroplane Jelly and Keen's Mustard (McCormick Foods Australia), and Lawry's and Adolph's.
McCormick is headquartered in Sparks, Maryland, and has approximately 8,000 employees.
McCormick all set to acquire Italian spicemaker
McCormick & Company, Inc. has signed an agreement to buy 100% of the shares of Drogheria & Alimentari, a privately held spice company based in Italy. The acquisition is worth $97 million and includes a cash payment of about $57 million and a potential earn-out payment of up to $40 million in 2018.
Founded in Florence, Italy in 1880, Drogheria & Alimentari is a family owned and run firm, which creates authentic Italian Spice Infused Oils and Spice Grinders. The 135-year-old privately held D&A is a leader in spices and seasonings in Italy and exports its products to around 60 countries. With annual sales of about $57 million, D&A rules about a third of the spice market in Italy.
D&A, who has about 120 employees and a manufacturing plant in Florence, will be McCormick's first acquisition in Italy.
The D&A acquisition deal is expected to close in May 2015, subject to regulatory approval.
What to look forward to after the acquisition?
The acquisition, though comparatively small for McCormick, which had $4.2 billion in sales in its last fiscal year, is considered to be a good move because D&A is a pioneer in its market.
McCormick will be hoping for steady growth for D&A premium products, particularly in the U.S. and other important international markets where there is a demand for unique and authentic traditional flavors. One expects the D&A brand will add value to the brands that McCormick owns across Europe, the Middle East and Africa.
The acquisition will help McCormick expand in Europe, which has been a part of the company’s strategy. It is known for its expansion through acquisitions and joint ventures, both nationally and in upcoming international markets.
According to Malcolm Swift, president of McCormick’s operations in Europe, Middle East and Africa, there is a strong compatibility between McCormick, which is a renowned flavor leader in the market, and Drogheria & Alimentaria, which has a reputation for supreme quality items and professionalism.
Due to the expense of acquiring D&A and merging the company, McCormick is not looking for impact on earnings per share in 2015. In 2016, McCormick will be looking forward to the acquisition to be completely accretive, not including any net growth in fair value of the prospective earn-out compensation.
