McCormick & Co. completed its purchase of the parent company of Cholula Hot Sauce for $800 million in cash, finalizing a deal announced last week.
The Hunt Valley spice and flavorings giant — which also owns the makers of French’s Mustard, Zatarain’s, Frank’s RedHot and Old Bay — said the deal rounds out its portfolio as a purveyor of hot sauce and condiments.
Shares in McCormick climbed 73 cents each to close Monday at $186.98.
Lawrence E. Kurzius, the company’s chairman, president and CEO, said Cholula creates long-term shareholder value.
“Cholula is a great strategic addition accelerating our condiment growth opportunities with a complementary authentic Mexican flavor hot sauce,” Kurzius said in a statement. “The talented employees of Cholula have built a strong foundation, and when combined with McCormick’s operational expertise and infrastructure, we plan to drive further growth of this iconic brand.”
Cholula has annual sales of about $96 million. McCormick, which has $5 billion in annual sales, expects to add to earnings per share in 2021. It was financed with cash on hand and commercial paper.