GNC Consumes Mexico Chocolatier

Colombian food company Grupo Nacional de Chocolates (GNC) has agreed to acquire Mexico’s Nutresa, which makes chocolates, for $95.3m. The deal, says GNC, is valued at 10x Ebitda. The buyer says it will use financing from banks and cash on hand to make the acquisition. “This transaction fits perfectly with GNC’s strategy and will strengthen its chocolate business in the strategic region that includes Mexico as one of the most attractive markets,” the buyer says. GNC does not reveal if it hired a financial advisor to help with the deal, but an analyst who covers the company speculates that Bancolombia’s investment banking unit may have been involved, since both have worked together before. The analyst says GNC has little debt and, as of September, about COP150bn in cash. An analyst at Colombia’s Bolsa y Renta says the deal is the country’s largest M&A transaction of the past 12 months. The analyst adds that the purchase will help GNC increase chocolate sales by 14%, to COP930bn from the COP818bn expected previously. Bolsa y Renta has a hold recommendation on the stock. GNC did not return calls for comment and a Nutresa spokesman declines to provide any additional information. Bancolombia executives did not respond to calls. The transaction, which awaits approval from Mexico’s antitrust commission, is expected to close in February, says GNC. GNC shares gained 2.4% January 28 to close at COP15,100.