CHICAGO _ The owner of the Jolly Green Giant is adding spices to its pantry: ACH Food Cos. plans to sell its spice business to B&G Foods for $365 million in cash, the companies announced Wednesday.
The deal price is subject to a post-closing inventory adjustment.
ACH Foods, a subsidiary of British-based Associated British Foods headquartered in suburban Chicago, is perhaps best-known as the maker of Argo Corn Starch and Mazola Corn Oil. Its spices and seasonings business includes the Spice Islands, Tone's and Durkee brands. It also produces Weber brand sauces and seasonings under a licensing deal. Parsippany, N.J.-based B&G produces Green Giant, Ortega, Cream of Wheat and other packaged foods.
"This acquisition will significantly broaden our position in the large and growing spices and seasonings category, which we believe is very relevant to today's consumer, who is looking for healthier options, simple ingredients and enhanced flavor," said Robert C. Cantwell, president and CEO of B&G, in a news release.
In addition to executive offices in the Chicago area, ACH has a plant in the area where it makes Mazola, Argo Corn Starch and Karo corn syrup. Representatives from B&G could not immediately be reached for comment.
B&G predicts that beginning in 2017, the acquired business will boost sales by $220 million to $225 million and increase adjusted diluted earnings per share by 26 to 28 cents. The company's stock climbed 30 percent in the past year.
Coming with the spice business is ACH's manufacturing facility in Ankeny, Iowa. The deal is expected to close by year's end.
