McCormick & Co Inc Expands Ownership in Mexico

By Hao Liu • Thursday, August 21 10:34 • Permanent Link

Mccormick & Company Inc. (NYSE: MKC) has announced its strategic move to acquire an additional 25% ownership interest in McCormick de Mexico from Grupo Herdez for $750 million. This acquisition will increase McCormick's ownership to 75%, creating opportunities for further growth in the Mexican market and providing a strategic platform for expansion in Latin America.

McCormick de Mexico's annual net sales are approximately $810 million and are expected to grow in the mid-single digits range. The product portfolio primarily consists of mayonnaise, with the flagship product being McCormick Mayonesa con Jugo de Limones, known for its creamy texture and unique flavor profile loved by Mexican consumers.

Following the acquisition, McCormick anticipates several positive impacts, including: Increased breadth and reach of the condiments and sauces portfolio, with the contribution to net sales expected to increase from 14% to 22%. Driving growth through leveraging expanded ownership in Mexico, a high-growth emerging market, and expanding into Latin America. * Accretive to sales growth and operating profit margin, with the transaction expected to be accretive to adjusted earnings per share in the first year.

Financially, the transaction represents an acquisition multiple of approximately 12 times 2025 EBITDA and annual recurring management fees. It is expected to be completed early in fiscal 2026 and will be financed with a combination of cash on hand and debt, with minimal impact to the company’s net debt to adjusted EBITDA ratio.

Goldman Sachs and Creel are serving as the financial advisor and legal counsel, respectively, to McCormick in connection with the transaction.

The company's executives, including Brendan M. Foley, Chairman, President, and CEO, and Marcos Gabriel, Executive Vice President & CFO, will host a conference call to discuss the announcement with the financial community. The webcast and accompanying presentation of the conference call will be available on McCormick’s website prior to the start of the call. As a result of these announcements, the company's shares have moved 1.2% on the market, and are now trading at a price of $69.88. For the full picture, make sure to review MCCORMICK & CO INC's 8-K report.

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