Marzetti (NASDAQ:MZTI) has strengthened its sauces portfolio through the acquisition of California-based Bachan’s in a deal valued at $400 million.
Bachan’s produces Japanese-American–style barbecue and dipping sauces and generated approximately $87 million in sales last year. The company was founded in 2019 by Justin Gill and is headquartered in Sebastopol, California.
Marzetti announced the acquisition alongside its latest financial results released on February 3, which showed second-quarter sales increased 1.7% year-over-year to $518 million. Year-to-date revenue rose 3.6% to $1.01 billion.
The transaction is expected to close before June 30, pending regulatory approvals.
David Ciesinski, Marzetti’s CEO, said: “This transaction will reinforce Marzetti’s position as a global leader in sauces by adding a premium brand that is exceptionally well aligned with evolving consumer preferences for global flavours and better-for-you products.
“Over time, we intend to further broaden distribution, support continued product innovation, and thoughtfully extend the brand into new channels and adjacent categories.”
Marzetti’s retail portfolio includes its namesake line of dressings and dips, as well as New York Bakery garlic bread and Sister Schubert’s bread rolls. The company also produces licensed sauces for the foodservice market, including products associated with brands such as Subway, Texas Roadhouse and Chick-fil-A.
Bachan’s founder and CEO Justin Gill said: “Over the last several years, building Bachan’s has allowed me to fulfil my childhood dream of bringing my family’s sauce to market. My team and I have been working incredibly hard to deliver on this vision of building the first iconic Japanese-American flavour brand.”
Within its quarterly results, Marzetti reported that retail sales declined 1.1% to $278 million during the second quarter, while out-of-home sales increased 5.2% to $240.4 million.
Consolidated operating income edged down 0.6% to $75.2 million. Net income rose 21% to $59.1 million, or $2.15 per diluted share, compared with $1.78 per share in the same period last year.
The company also recorded $1.7 million in restructuring and impairment charges related to manufacturing equipment during the quarter.
For the first six months of the fiscal year, net income increased 13.5% to $106.3 million, or $3.86 per diluted share, up from $3.40 per diluted share a year earlier.
Marzetti previously operated under the name Lancaster Colony before adopting its current corporate identity last year under CEO David Ciesinski.