Houchens did not disclose terms of the cash deal to acquire Tampico, a brand sold in more than 36 countries. It produces refrigerated juice drinks and is a supplier of value-added juice drink concentrates.
Tampico, with retail sales exceeding $350 million last year and yearly sales growth of about 10%, fit perfectly into [image-nocss] Houchens' growth model, Houchens President Spencer Coates said. "Our strategy is to diversify our holdings so we don't have too many eggs in one basket, and to buy very profitable companies that have growth potential and have good management," he told AP.
Houchens said Tampico Beverage will retain its name, employees and management team based in Chicago.
It was the latest acquisition by a company that has accelerated its buyout activity since clearing about $1.5 billion from the sale of its Commonwealth Brands cigarette subsidiary to the British company Imperial Tobacco Group PLC in a $1.9 billion deal in 2007.
Already this year, Houchens has closed deals to acquire brokerage and financial services firm Hilliard Lyons and the Cohen's Fashion Optical chain. It also acquired regional grocery store chain Buehler Foods and acquired 50% interest in a Kentucky-based fence materials distribution company.
Buehler Foods operates retail grocery stores and fuel stations in Indiana, Kentucky and Illinois.
In late January, Houchens Industries purchased 14 Shell-branded sites from Browning Oil, a move that demonstrated that the company is currently in an "acquisition mode," officials said at the time. Jimmie Gibson, CEO for Houchens, told CSP Daily News, "We'relooking for continuous growth in adjacent territories."
Coates said Houchens would continue to look to add more companies. "You don't earn much from cash sitting there," he told AP.
Houchens Industries, based in Bowling Green, Ky., runs about 150 grocery stores under the Houchens, Food Giant, IGA, Piggly Wiggly and Mad Butcher banners. Its 220-plus Save-A-Lot discount grocery stores in 13 states offer limited selections and cover 15,000 sq. ft. or less. Houchens also owns about 40 Jr. Foods convenience stores and 23 Tobacco Shoppe discount cigarette outlets, mostly in Kentucky and Tennessee. Other businesses include construction, financial services, real estate and recycling. Founded as BG Wholesale in 1918 by Ervin Houchens, the firm is 100% owned by its employees.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.