McCormick buys Australian maker of gelatin desserts

September 02, 1994|By Ross Hetrick | Ross Hetrick,Sun Staff Writer

In yet another step in expanding its global food empire, McCormick & Co. Inc. yesterday announced it has acquired the assets of Traders Pty. Ltd., one of Australia's largest makers of gelatin desserts.

The terms were not disclosed.

"We feel very excited about this acquisition because we believe the category has significant development opportunities," said James J. Albrecht, group vice president for McCormick's Asia/Pacific zone.

"We see not only growing the business within the present framework, but also expanding the product mix to really put a lot of excitement in the category," he added.

Mr. Albrecht said the purchase of the Sydney-based company is "slightly out of the batter's box" for McCormick because Traders makes an end-use food product, rather than ingredients -- which has been McCormick's specialty.

While he said the new product could be extended into Asian markets, he added that McCormick would approach other ventures in ready-to-eat products cautiously.

"We want to make sure we do not lose our focus on the things that have made McCormick the success it has been," Mr. Albrecht said.

The purchase, the eighth foreign acquisition or joint venture announced this year, is part of McCormick's strategy to become more of a worldwide company. Already foreign revenues account for about a third of the $1.9 billion generated last year by company-owned operations and joint ventures.

"The international strategy puts some impressive numbers up on the board," said David S. Leibowitz, managing director of Burnham Securities Inc., a New York brokerage. "The acquisition clearly broadens their reach. It makes them a tougher competitor and puts another arrow in the company's quiver."

This acquisition by itself will do little to lift the company's stock price, which has been suffering in recent months, according to Kurt Funderburg, a stock analyst for Ferris Baker Watts in Baltimore. But the cumulative effect of this and future purchases should increase the stock price in coming years, he said.

The company's stock dropped 25 cents a share yesterday to close at $19.50.

The Sparks-based spice and flavorings company has been in Australia for 30 years and is a major spice seller there with annual sales of about $25 million, said Jorge E. Slater, vice president and managing director of the Asia/Pacific zone.

Trader, which also makes maple syrup and other food flavors and colors, sells its gelatins under the brand name Aeroplane Jelly. Mr. Slater said the name came from the novelty of airplanes early in the century.

"The founder of the company thought that would be a good name and logo to use, connoting leading-edge technology as well as being high above anything that was in the market," he said.

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