McCormick to acquire additional 25% interest in McCormick de Mexico for $750M

McCormick (MKC) announced that it has signed a definitive agreement, subject to customary closing and regulatory conditions, with Grupo Herdez to acquire an additional 25% ownership interest in McCormick de Mexico, a joint venture formed in 1947, for $750M. The acquisition will increase McCormick’s ownership to 75%, creating opportunities for further growth in the Mexican market. Additionally, the transaction provides a strategic platform for further expansion in Latin America. McCormick de Mexico’s annual net sales are approximately $810M and are expected to grow in the mid-single digits range. McCormick de Mexico has a history of sales growth and a margin profile, which will be accretive as they will be fully consolidated into total McCormick’s financial results, following the close of the transaction. In addition, 25% of McCormick de Mexico’s net income, associated with Grupo Herdez’s ownership, will be eliminated and reflected in total unconsolidated income. The transaction is expected to be accretive to adjusted earnings per share in the first year. McCormick has entered into a definitive agreement, subject to customary closing and regulatory conditions, to acquire an additional 25% ownership interest in McCormick de Mexico, for $750 million, increasing its ownership to a controlling 75%. The transaction represents an acquisition multiple of approximately 12 times 2025 EBITDA and annual recurring management fees. The transaction 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. The company will incur certain transaction costs that will impact earnings per share.