Coniexpress Buy Seen Positive for Heinz

US-based ketchup maker HJ Heinz’s announcement that it is acquiring an 80% stake in Brazilian peer Coniexpress for a rumored $700m is seen as a positive strategic move by equities analysts who cover the buyer. Coniexpress is the maker of the Quero brand of tomato sauces, ketchup, paste and condiments and holds the top 1 or 2 positions in numerous tomato-based categories in Brazil and the leading position in vegetables, according to Heinz. “I think Coniexpress is a strategic fit with Heinz’s core categories and brings the opportunity to expand Heinz’s brands in Brazil as well as introducing the Quero brand to international retailers like Walmart and Carrefour,” says a New York-based equities analyst. Regarding the price Heinz is said to be paying, another New York-based analyst says that if the rumors are correct, then Heinz should be paying about 18x Ebitda for the target. “Heinz is likely paying a premium given the expected growth in Brazil’s consumer demand,” the analyst says. Heinz, which was advised by JPMorgan, expects to close the transaction in the next few months.