US – American multinational food ingredients company McCormick has announced the acquisition of Fona International, a manufacturer of clean and natural flavours for the food, beverage and nutritional markets, for US$710 million.
As part of the deal, McCormick has purchased 100% of the shares of the privately-held US company to reinforce its global growth strategy.
Founded in 1986, Fona International is an independent manufacturer of flavours with a focus on health and performance nutrition applications.
Its acquisition will enhance the McCormick’s Flavor Solutions business unit, which provides flavors and flavor technologies to consumer-packaged goods manufacturers and foodservice companies.
McCormick says the deal will broaden its product offering, accelerate its global flavour growth and enable it to meet the growing demand for clean and flavourful eating, drinking and nutrition experiences.
The acquisition will also reportedly strengthen McCormick’s clean and natural position, enabling better address demand in the better-for-you flavour product development.
“The acquisition of Fona reinforces McCormick’s global growth strategy as Fona expands the breadth of our flavour solutions segment into attractive categories, as well as extends our technology platform and strengthens our capabilities.”
Lawrence Kurzius, chairman – president and CEO of McCormick.
Headquartered in Illinois, Fona has annual sales of approximately US$114 million and is expected to grow at a mid-to high-single-digit rate.
The business hires approximately 220 employees and operates a manufacturing and technical innovation centre.
“Fona will be the cornerstone for accelerating McCormick’s flavour platform in the Americas. With our passion for flavour, focus on insight-driven innovation and differentiated customer engagement, we look forward to continuing and building upon the legacy created by the Slawek family,” Kurzius added.
Joseph Slawek, founder, CEO and chairman of Fona International, said: “We are confident McCormick will further enable Fona’s forward momentum by continuing to make investments in growth initiatives, capabilities and people.”
McCormick noted that it purchased the 100% shares of the US company on a cash free, debt free basis, subject to customary working capital adjustments and notes that it will finance the transaction with cash and commercial paper.
While this transaction will increase McCormick’s net-debt-to-adjusted EBITDA ratio, the Company says it is committed to a strong investment grade credit rating, paying down debt with anticipated strong cash flow generation and maintaining its dividend policy.
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