McCormick to buy Italy’s Drogheria & Alimentari

McCormick & Company (MKC) has signed an agreement to buy 100% shares of the Italy-based spices and seasonings company Drogheria & Alimentari (D&A) for €85m ($97m).

Including a cash payment of about €50m, the purchase price also has a potential earn out payment in 2018 of up to €35m based on the performance of the business.

McCormick chairman and CEO Alan Wilson said: "We are pleased to expand our portfolio of leading brands around the world with the addition of Drogheria & Alimentari. As a supplier of both brand and private label products, D&A has approximately one third of the spice and seasoning category in Italy and exports its products to 60 other countries.

"We anticipate strong growth for these premium products, particularly in the US, and key international markets where consumers are seeking unique and authentic ethnic flavours."

The deal might be completed by May 2015 and will be subject to regulatory approval.

McCormick said that due to the estimated impact of transaction and integration costs, it expected no earnings per share impact in 2015. However, in 2016, the company expects the acquisition to be fully accretive.

The acquisition is expected to complement McCormick’s brands across EMEA, while expanding its existing spice and seasoning leadership in Europe with a sizable footprint in Italy.

D&A was founded in 1880 and currently employs around 120 employees. Its annual sales are around €50m ($57m), with 80% in Italy and 20% exported to 60 other countries.