McCormick called hot sauce a high-growth category and said Cholula will pair well with its portfolio of seasonings and other products.
As McCormick continues to capitalize on the growing consumer interest in healthy and flavorful eating, Cholula, a brand known for authentic bold and spicy Mexican flavors, is a strong complement to our portfolio," Chief Executive Lawrence Kurzius i in a statement.
Cholula has annual net sales of about $96 million and McCormick expects growth in the mid-to-high single-digits percent in a post-covid-19 environment. Cholula's business will add to adjusted earnings per share in 2021.
McCormick will retain the Cholula brand name in both its retail and food service channels.
"In a category that continues to benefit from a number of strong secular tailwinds and attractive consumer trends, Cholula's best-in-class team and refocused business strategy have positioned the company as a clear leader in a large and growing segment," Scott Dahnke, global co-CEO of L Catterton, Greenwich, Conn., said.
The PE firm said in a statement that it "helped unlock Cholula's potential by investing heavily behind the brand and product, with a focus on building consumer awareness and loyalty."
Cholula's commercial strategy "centered on investments designed to drive new restaurant partnerships, retail distribution, and in-store execution," the firm said.
Morgan Stanley is lead financial adviser to Cholula. Catterton acquired Cholula in April 2019.
McCormick shares at last check were 1% higher at $184.83.