Arca Continental to acquire two snack food companies

Mexican soft-drink bottler Arca Continental has agreed to acquire two snack food companies – US-based Wise Foods and Ecuador-based Industrias Alimenticias Ecuatorianas – for an undisclosed amount.

Arca Continental has agreed to acquire Wise Foods from US-based private equity firm Palladium Equity Partners, and the transaction is subject to customary regulatory approvals.

Both Wise Foods and Industrias Alimenticias Ecuatorianas own leading salty and sweet snack brands in their respective markets, and the acquisition will strengthen Arca Continental’s snack business in Mexico, which produces snacks under the Bokados brand.

The integration of the two companies with Arca Continental’s snack business is expected to result in net sales of nearly $400m in 2013.

Arca Continental chief executive officer Francisco Garza-Egloff said that the acquisitions will expand the company’s presence in both markets, allowing it to develop new growth opportunities.

"Both provide a solid platform that will bring innovation to our portfolio, product and brand expansion as well as beneficial synergies and the sharing of best practices," Garza-Egloff added.

Wise Foods, which was acquired by Palladium Equity Partners in 2000 for $96m, has manufacturing operations in Berwick, Pennsylvania, and employs 850 people.

The company produces nearly 40,000t of snacks per year under brands such as Wise, Cheez Doodles and Moore’s, and it has a presence in 21 states in the US.

Palladium Equity Partners said that Wise Foods’ staff and leadership team will be retained, and will be led by the current chief executive officer Michael Scott.

Arca Continental noted that the purchase of Wise Foods will build up its marketing capabilities in its related businesses in the US, where it has been operating since 25 years, primarily in California and Texas.

Industrias Alimenticias Ecuatorianas produces salty, sweet and savoury snacks under brands such as Inacake, Tigreton, Tortolines, Riskos and Tornaditos, and has a workforce of 400.

The company has two facilities in Guayaquil and Quito that produce nearly 8,000t of products annually.

Arca Continental, which was established in through the merger of Embotelladoras Arca and Grupo Continental, produces, distributes and sells non-alcoholic beverages under The Coca-Cola Company brand.