NEW YORK (TheStreet) -- McCormick & Co (MKC) shares are up 2.02% to $81.88 in early market trading on Wednesday after the food seasoning and condiment manufacturer acquired barbecue sauce maker Stubb's for $100 million in cash.
The Sparks, MD-based company purchased Stubb's from privately held One World Foods and expects the company to report annual sales of $30 million this year.
McCormick doesn't expect today's purchase to impact its earnings this year, but the company expects incremental EBITDA of at least $10 million by 2017.
"Through marketing and innovation, we intend to build this base, increase household penetration and expand retail distribution in the U.S. and internationally. The Stubb's products round out the range of grilling products currently marketed by McCormick under the Grill Mates, Lawry's and McCormick brands. We look forward to working with the Stubb's employees to drive increased sales and profit for this business," said CEO Alan Wilson
TheStreet Ratings team rates MCCORMICK & CO INC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate MCCORMICK & CO INC (MKC) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income."