McCormick Acquires Australian Packaged Herbs Co.

McCormick & Company, Incorporated has purchased 100 percent of the shares of Botanical Food Company, Pty Ltd, a privately held company based in Australia that manufactures and sells the Gourmet Garden brand of packaged herbs. McCormick has acquired the business for a cash payment of approximately 150 million Australian dollars ($114 million U.S. dollars), subject to certain closing adjustments.    

Gourmet Garden's closer to fresh products complement McCormick's existing branded herb portfolio with the addition of chilled convenient herbs located in the perimeter of the grocery store, say company officials. McCormick plans to drive sales of the Gourmet Garden brand by expanding global distribution and building awareness with increased brand investment.

"We are pleased to expand our portfolio of leading brands around the world with the addition of Gourmet Garden," says Lawrence E. Kurzius, president and chief executive officer at McCormick. "As a global market leader in chilled convenient packaged herbs, Gourmet Garden exports its products to 15 countries with the largest market being the United States. We anticipate strong growth for these products, particularly in the U.S. and key international markets where consumers appreciate the value and accessibility of cooking with a more convenient flavoring alternative.  

"The Gourmet Garden brand offers a more convenient alternative to consumers who currently buy fresh herbs," Kurzius adds. "The owners and employees of Gourmet Garden have built a great business, and we look forward to working with them to achieve continued success." 

Founded in Australia in 1999, Gourmet Garden has approximately 200 employees and a modern manufacturing facility located in Queensland, Australia. McCormick expects to work with the current management of Gourmet Garden to continue to drive double-digit sales growth for the next several years through expanded distribution, increased brand marketing and greater household penetration. Currently, more than 90 percent of Gourmet Garden sales are to retail customers located in North America and Australia.

Based on the purchase price of approximately 150 million Australian dollars the transaction multiple is expected to be approximately 12 times EBITDA (earnings before interest, tax, depreciation and amortization). Due to the estimated impact of transaction and integration costs, McCormick expects no earnings per share impact in 2016. In 2017, McCormick expects the acquisition to be fully accretive.