McCormick Takes Silvo
McCormick & Company Incorporated announced that it has completed the purchase of C.M. van Sillevoldt B.V. for 58 million euros ($75.2 million) in cash. This company sells spices, herbs and seasonings under the Silvo brand in The Netherlands and the India brand in Belgium. The purchase price is a multiple of approximately nine times current year earnings before interest, tax, depreciation and amortization. McCormick will fund the purchase price with cash from operations and current credit facilities.
The Silvo business dates back to 1833. Today, the brand has a high recognition among consumers in The Netherlands. Net sales of the business have increased at a 5% compound annual growth rate since 1999 and reached 38 million euros ($49.3 million) in 2003.
For McCormick's 2005 fiscal year, in U.S. dollars, the acquisition is expected to have a positive impact on gross profit margin, operating income margin and cash flow, and to add $0.01 to earnings per share and approximately $50 million to net sales. In 2006, earnings per share are expected to benefit an additional $0.01-$0.02.
Robert J. Lawless, chairman, president and CEO of McCormick, stated, "A primary avenue of growth for McCormick is the acquisition of leading brands in key markets. Since the acquisition of Ducros in 2000, we have directed our efforts to expansion in Europe. The Silvo acquisition fits squarely within this strategy, extending our presence into The Netherlands with a strong leading brand. We welcome the Silvo employees to our team and are pleased to add the Silvo products to our lineup of great brands around the world."