Kuo JV Buys US Food Company

MegaMex Foods, a joint venture between US-based food company Hormel and Mexico’s Herdez del Fuerte, which is 50% owned by Grupo Kuo, is acquiring California’s Don Miguel Mexican Foods. Financial terms were not disclosed, but a Mexico-based equity analyst estimates the deal is worth MXP1.6bn ($123m), or about 8.5x Ebitda. He adds that it will be financed with a combination of debt and cash on hand. The sellers are California-based private equity shop TSG Consumer Partners and Don Miguel chairman Steve Charton. Don Miguel, founded over 100 years ago, was acquired by Charton in 1990. TSG invested in the company in 2002. James O’Hara, managing director at TSG says that the shop held a majority stake in Don Miguel, while Charton held a minority stake. He would not disclose how much each held nor confirm the sale price. Piper Jaffray advised the sellers while Chicago-based boutique investment bank JH Chapman advised MegaMex.