McCormick completes acquisition of Stubb’s

McCormick & Company, a global leader in flavour, has completed the acquisition of Stubb’s for approximately $100 million.

Stubb’s barbeque sauces are the leading premium barbeque sauce brand in the US. In addition to sauces, Stubb’s products include marinades, rubs and skillet sauces.  Annual sales of the business are projected to be $30 million in 2015 and are expected to grow at a double-digit rate annually for the next several years.

McCormick’s intends to build Stubb’s by expanding retail distribution in the US and internationally

The Stubb’s products round out McCormick’s range of grilling products currently marketed under the Grill Mates, Lawry’s and McCormick brands.  McCormick intends to maintain the headquarters of Stubb’s in Texas, and build the business through increased household penetration and expanded retail distribution in the US and internationally.

McCormick acquired the Stubb’s business for a cash payment of approximately $100 million subject to certain closing adjustments.  Due to the estimated impact of transaction, integration and financing costs, McCormick expects no earnings per share impact in 2015 from this acquisition.  However, with plans to achieve strong growth and significant cost synergies McCormick expects incremental EBITDA (earnings before interest, tax, depreciation and amortization) of at least $10 million by 2017.