Ethnic foods are one of the fastest growing segments of the $600+ billion food and beverage industry. According to Hispanica International Delights of America Inc. (OTC: HISP), an emerging leader in the ethnic food and beverage market, sales of ethnic foods are expected to surpass $12 billion by 2018. These trends are driven by the rapidly growing ethnic populations in the United States that large multinational companies are increasingly interested in targeting.
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In this article, we will take a look at recent mergers and acquisitions in the ethnic food industry and why investors may want to consider Hispanica for their speculative portfolios.
Accelerating M&A in Ethnic Foods
The ethnic food and beverage industry has seen a number of high profile mergers and acquisitions as large companies and investment funds look to tap into lucrative new markets.
Grey Mountain Partners recently announced the purchase of Kronos Foods Inc. for an undisclosed amount. The Illinois-based ethnic food company makes gyro meats, hummus, baklava, pita breads, flatbreads, yogurt, and sauces with a Mediterranean focus. Mediterranean foods have become increasingly popular in the United States, making these kinds of brands a valuable addition to any food and beverage portfolio.
There have also been a number of other deals in the ethnic food space, including Findus Spain’s purchase of La Cocinera from Nestle, Diaz Food’s acquisition of La Cena Fine Foods, and Ajinomoto’s $800 million purchase of Windsor Quality Holdings LP, which makes nacho bites and other appetizer foods. In some cases, private equity funds purchase these companies to grow them or larger companies may buy them as strategic acquisitions.
Hispanica is Well Positioned
Hispanica International Delights of America Inc. (OTC: HISP) represents a unique opportunity to capitalize on the growth of the ethnic food industry.
The company secured a $7.5 million credit facility in early-July that will finance an acquisition strategy within the ethnic food and beverage market. In August, the company acquired Energy Source Distributors Inc., which adds nearly $3 million in annual revenue and provides extensive distribution for its existing and future product lines. These distribution channels include more than 2,000 retail locations like 7Eleven, Safeway, Walmart, and others.
Management plans to expand its brand portfolio and leverage ESD’s distribution channels to unlock future value. For example, the company entered into an exclusive distribution agreement with Plantain Republic SA on September 28 to distribute its TropicMax brand of plantain chips in Northern California. The deal provides the company with another line of proprietary products to offer its direct store delivery customers.
The ethnic food and beverage industry continues to witness significant growth within the $600+ billion industry. With a number of recent mergers and acquisitions in the space, Hispanica International Delights of America Inc. (OTC: HISP) could become an acquisition target for a financial or strategic buyer. The company has acquired valuable distribution channels and is in the process of launching branded products throughout the country.
For more information, visit the company’s website at www.hispanicadelights.com where investor presentations and recent updates are available.