McCormick & Company has purchased 100% of the shares of Botanical Food Company, a privately held company based in Australia that manufactures and sells the Gourmet Garden brand of packaged herbs.
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Gourmet Garden annual sales are approximately 70 million Australian dollars ($53 million) and growing at a double-digit rate.
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. McCormick plans to drive sales of the Gourmet Garden brand by expanding global distribution and building awareness with increased brand investment.
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.
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% of Gourmet Garden sales are to retail customers located in North America and Australia.
The purchase price for Gourmet Garden is approximately 150 million Australian dollars ($114 million), subject to certain closing adjustments.
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. ■