Former NBA All-Star Dywane Wade, Dallas Cowboys quarterback Dak Prescott, and Houston Texans defensive end J.J. Watt are among 85 athlete investors poised to handsomely profit from a recent acquisition of Cholula Food Co. by the Maryland food company McCormick.
The star-studded group of athletes is about to hit a collectively big payday, with the sale going for $800 million. The Fortune 1000 company already has a robust portfolio of subsidiaries that includes Old Bay Seasoning, Lawry’s, and Frank’s RedHot, and the addition of Cholula appears to be part of an aggressive growth strategy on McCormick’s part.
According to an interview with CNN, McCormick’s president and CEO Lawrence Kuzius said, “One of the things that we’ve been able to do with Frank’s is extend it beyond hot sauce. McCormick has launched Frank’s frozen buffalo wings, among other things. We can do the same with Cholula. There are a lot of opportunities to extend this brand.”
McCormick announced the agreement to acquire the parent company of Cholula Hot Sauce, a premium hot sauce brand that delivers authentic Mexican flavor. “Cholula is highly complementary to our existing hot sauce portfolio.” said CEO @LKurzius. https://t.co/TQoO4iEmou pic.twitter.com/GTm8MnNfgM
— McCormick Corp (@McCormickCorp) November 24, 2020
Two years ago, Cholula was purchased by private equity company L Catterton, the price of which remains undisclosed. The group of athletes came together just a few years ago with the help of an entrepreneur.
“The athletes invested in Cholula through Patricof Co, an investment platform created in 2018 by investment banker and entrepreneur Mark Patricof,” reads Forbes Magazine. “The business operates along twin paths, as an advisory practice, and as an investment platform. Athletes receive financial advice gratis and are expected to invest roughly $500,000 annually toward private-equity deals.”
Current projections are that Cholula’s sale to McCormick should generate returns that quadruple the athletes’ initial investments, so they’ll be getting a pretty big bag.