MegaMex Buys Don Miguel

Hormel, Herdez Del Fuerte JV expands Mexican foods portfolio

CHINO, Calif. -- MegaMex Foods LLC has announced a definitive agreement to acquire 100% of the stock of Don Miguel Foods Corp. from TSG4 LP. The transaction, expected to close in October 2010, is subject to customary closing conditions, including regulatory approval. Terms of the agreement were not disclosed.

Don Miguel Foods provides branded frozen and fresh authentic Mexican flavored appetizers, snacks and handheld items. The portfolio includes mini tacos, flautas, taquitos, empanadas, burritos and roller grill items. The Anaheim, Calif.-based company has a manufacturing [image-nocss] and distribution center located in the Dallas area.

"Growth through the strategic acquisition of Don Miguel Foods is an important step toward making us stronger for the future," said Enrique Hernandez-Pons Torres, chairman of of MegaMex. "Adding these leading product categories to our portfolio brings us closer to achieving our goal of being a one-stop-shop for Mexican foods for our customers."

Luis G. Marconi, managing director at MegaMex, added, "Don Miguel Foods will add new competencies that will allow us to continue expanding our presence in the nation's leading convenience stores, club stores and supermarkets."

TSG4 is a private-equity fund sponsored by TSG Consumer Partners LLC and private investors. The Don Miguel business, founded more than 100 years ago, was acquired by Steve Charton in 1990; TSG Consumer Partners invested in the company in October 2002.

"Besides providing substantial consumer sector expertise, TSG was enthusiastic about continuing to make the substantial investments in operations, new product development and sales and marketing activities that were critical to our accelerated growth," Charton said in another statement.

James L. O'Hara, a managing director and partner at TSG called MegaMex the "ideal steward for continuing to grow the business going forward."

Other TSG investments have included Smashbox Cosmetics, PureOlogy, Smart Balance and VitaminWater.

Chino, Calif.-based MegaMex Foods was advised in the transaction by J.H. Chapman Group LLC. The seller was advised by Scott LaRue and Matthew Roghair of Piper Jaffray & Co. and Eva Davis of Kirkland & Ellis LLP.

MegaMex is a joint venture between Hormel Foods Corp. and Herdez Del Fuerte SA de CV. Austin, Minn.-based Hormel Foods is a multinational manufacturer and marketer of consumer-branded food and meat products. Herdez Del Fuerte, based in Mexico City, is a manufacturer and marketer of consumer-branded food and beverages in Mexico and the United States. Herdez Del Fuerte is a joint venture between Grupo Herdez SAB de CV and Grupo KUO SAB de CV.

TSG Consumer Partners LLC is a private-equity firm in the U.S. focused exclusively on the consumer sector. TSG focuses on investing in natural and organic foods companies as well as companies focused on ethnic foods, functional food and beverage categories and orphan brands in the personal care and household sectors.