Global flavor and seasoning player McCormick & Company has acquired a 100 percent share of FONA International, an independent manufacturer of flavors, focusing on nutritional and natural products for the food, beverage and nutritional markets.
McCormick’s clean and natural flavor platform is enhanced with the addition of FONA’s predominantly natural portfolio.
In particular, the acquisition is expected to strengthen McCormick’s leadership in better-for-you flavors for health and performance nutrition applications.
“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,” says Lawrence Kurzius, chairman, president and CEO of McCormick.
McCormick purchased the business for US$710 million in cash and expects the transaction to be neutral to adjusted earnings per share in 2021 and accretive in 2022, excluding transaction and integration costs.
FONA’s annual sales are approximately US$114 million and are expected to grow at a mid-to-high single digit rate.
“This acquisition 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,” details Kurzius.
Joining forces to accelerate wellness
McCormick has a history of creating value through acquisitions, explains Kurzius.
“We are confident this is a great strategic fit with our vision of being a leading flavor company.”
By combining the portfolios and infrastructures, McCormick adds manufacturing capacity as well as greater scale and expects to accelerate its global flavor growth.
The acquisition will also augment McCormick’s innovation capabilities and technology platform with the addition of FONA’s proprietary encapsulation methods.
FONA’s experienced R&D team will also bring expertise in flavoring health and performance nutrition products across a variety of applications.
“We are confident McCormick will further enable FONA’s forward momentum by continuing to make investments in growth initiatives, capabilities and people,” says Joseph Slawek, founder, CEO and chairman of FONA International.
“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,” adds Slawek.
Building on a brand
FONA is a well-recognized brand that McCormick plans to retain.
“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,” notes Kurzius.
“FONA will be the cornerstone for accelerating McCormick’s flavor platform in the Americas,” he asserts.
Through this acquisition, McCormick is positioned to reach a broader customer base, deepen existing customer relationships by cross-selling and establish inroads with new customers while driving innovation.
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