Heinz Buys Soy Sauce Maker for $165 Million

PITTSBURGHH.J. Heinz Co. signed an agreement to acquire Foodstar, a manufacturer of soy sauces and fermented bean curd in China, from Transpac Industrial Holdings Ltd., a private equity holding company, and various Transpac Funds. The acquisition of Foodstar would increase Heinzs annual sales in China to about $300 million and enable Heinz to enter the nations fast-growing $2 billion retail soy sauce market.

The purchase price consists of a cash payment at closing of $165 million and an earn-out potentially payable in 2014 based on the performance of the business. The completion of the proposed acquisition is subject to regulatory approval in China and other customary conditions.

Foodstars Master Weijixian light premium soy sauce is the leading brand of Weijixian soy sauce in the southern region of China. Foodstars Guanghe fermented bean curd, a popular flavor enhancer that is used in cooking, also holds a strong regional market position. Based in Guangzhou, Foodstar has four manufacturing sites and 2,500 employees in China. A new manufacturing facility is being constructed in Shanghai.

Through the acquisition, Heinz is entering a retail soy sauce market in China that is growing at an annual rate of 7 percent to 8 percent. The Weijixian soy sauce segment, where Foodstars Master brand is a strong competitor, has grown at a much higher rate than the total soy sauce category. Heinz already produces ABC®, a leading brand of soy sauces in Indonesia and it markets soy sauces such as Amoy® in other markets around the world.