To McCormick's eyes, British food firm Premier Food Plc just got more attractive.
McCormick & Co., through its executives, expressed renewed interest to buy the British food company, even hinting the possibility of increasing their previous offer according to an article in The Baltimore Sun by Natalie Sherman. This comes after Premier showed impressive first quarter performance which saw its earnings rose to more than 30 percent compared to year-ago levels due to the firm deepening its presence in the Eastern European market, the introduction of organic products and various acquisitions.
McCormick previously made a $700 million cash offer to the Premier but was rejected by the latter's board. This time, however, McCormick announced last week that it could increase its offer if it was allowed to see Premier's pension obligations, probably to asses the target company's financials better.
Founded in 1976, Premier Foods is a well established UK-based food manufacturer of cooking sauces and cakes mixes brands according to Wikipedia. These include Mr. Kipling, Ambrosia, Angel Delight, Homepride, Sharwood's Loyd Grossman, Oxo, Bisto and Batchelors and cakes under Cadbury's name.
On the other hand, McCormick and Co specialized in the manufacturing of spices, herbs and flavorings. Founded in 1889, it is now a Fortune 1000 giant employing 8,000 with$4 billion revenue.
McCormick executives believe that the two companies' products perfectly complement each other according to Sherman's article. In addition, McCormick CEO Lawrence E Kurzius sees the possible Premier Foods acquisition as perfectly sized - large enough to make a substantial impact yet would still leave McCormick's coffers with enough stash to engage in smaller acquisitions.
McCormick saw a rise in its shares last Tuesday when it announced that its net income increased to $93.4 million in the three months ending February 29 this year, compared with $70.5 million back in 2015 with shares ending $99.59 by day's end or gaining 2.3 percent for that day.
