McCormick Inks a Tie-Up With Flavor Manufacturer Enrico Giotti; We've Yet to Sweeten to Shares
Wide-moat McCormick announced a deal to acquire Enrico Giotti, an Italy-based manufacturer of natural flavors, aromatic herbal extracts, and concentrated juices, for $127 million, equating to 2.3 times sales and 12 times EBITDA. But at just 1% of McCormick’s consolidated sales base, the tie-up is not material enough to alter our $91 per share fair value estimate.We had expected McCormick would utilize its robust free cash flow (which we forecast will average more than 12% of sales on average an...
McCormick & Co. manufactures, markets and distributes spices, seasoning mixes, condiments and other flavor products to the food industry- retailers, food manufacturers and foodservice businesses. The company also is partner in a number of joint ventures that are involved in the manufacture and sale of flavor products. The company's business segments comprised of: consumer, in which the company markets its products to customers and supplies private label items, known as store brands; and flavor solutions, which provides a range of flavor solutions including seasoning blends, spices and herbs, condiments, coating systems and compound flavors.
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