McCormick & Co. has agreed to buy Cholula from private-equity firm L Catterton for $800 million in cash to increase its offerings in the fast-growing hot-sauce market.
McCormick, a maker of seasonings, spices and condiments, will finance the purchase with cash on hand and commercial paper, the Hunt Valley, Maryland-based company said in a statement.
The owner of brands including French’s yellow mustard, McCormick has seen demand rise this year as the coronavirus pandemic prompts more people to cook and eat meals at home. It already owns Frank’s RedHot, another popular hot sauce.
“Hot sauce is an attractive, high-growth category and, as an iconic premium brand, Cholula is outpacing category growth,” Lawrence Kurzius, McCormick’s chairman and CEO, said in the statement.
L Catterton, based in Greenwich, Connecticut, has more than $20 billion under management and typically invests in consumer brands. It bought Cholula in 2019.