, Columnist
Mustard at a Price That Makes Your Eyes Water
Reckitt has secured a supersized value from McCormick for its food business.
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Mustard. It's the new hot thing. McCormick & Company Inc. has just agreed to pay a scorching $4.2 billion for Reckitt Benckiser Group Plc's food business, home to brands including French's mustard and Frank's RedHot sauce.
On any conventional yardstick, Reckitt has secured a supersized price: seven times the unit's estimated sales and 25 times its forecast operating profit for 2017. That compares with less than one times sales and 16 times operating profit for food sector acquisitions in the last three years, according to data compiled by Bloomberg.