McCormick & Co. might not be finished shaking things up

The Sparks-based company last week agreed to purchase the assets of the Lawry?s and Adolph?s brands from Unilever, with U.S. offices in New Jersey, for $605 million in cash.

The Lawry?s business, which includes a wide collection of marinade and seasoning blends, generates about $150 million in annual sales in the United States and Canada. McCormick said the company plans to grow sales by 4 percent to 6 percent through “innovation and focused marketing.”

McCormick is already strongly positioned, controlling about half the spice and seasoning market in North America, said Ann Gilpin, an analyst who tracks McCormick for the investment research firm Morningstar.

“From a strategic standpoint, we think this is a great move by McCormick,” Gilpin wrote in recent report on the company. “We think this strengthens McCormick?s wide economic moat, as the acquisition essentially eliminates a key competitor.”

The shopping might not end there for McCormick, Gilpin added. The company could be interested in Kraft Foods? A.1. steak sauce and Grey Poupon mustard brands.

“The acquisition of attractive consumer brands to complement our existing portfolio of flavors for food is one of our key objectives,” Robert Lawless, McCormick?s chairman and CEO, said in a statement. “With its strong heritage in delivering distinctive full flavors to main meals, Lawry?s will be an excellent addition to our portfolio of products.”

In the third quarter of 2007, McCormick?s earnings increased 32 percent to $57 million from $43 million during the same period last year. Net sales increased 8 percent to $716 million from $663 million during the third quarter of fiscal 2006.

Since the beginning of the year, McCormick?s share price has decreased about 1.3 percent.

McCormick & Co. is part of The Examiner Top 10, a portfolio of some of the largest publicly traded companies in the Baltimore region.

[email protected]