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L Catterton to Acquire Cholula

12 December 2018

Private equity firm L Catterton has announced that it has entered into a definitive agreement to acquire Mexico-based hot sauce producer and distributor Cholula.

(Press ReleaseL Catterton, the largest and most global consumer-focused private equity firm in the world, today announced that it has entered into a definitive agreement to acquire Cholula, a leading producer and distributor of hot sauce. Terms of the transaction were not disclosed.  This investment represents a collaboration between L Catterton’s Flagship Buyout Fund and L Catterton Latin America, and speaks to the strength and interconnectedness of L Catterton’s global franchise.

Named after the oldest still-inhabited city in Mexico and introduced into the U.S. in 1989, Cholula has grown to become one of the most beloved hot sauce brands in the world. Cholula is distinguished by its authentic heritage, distinctive flavor profile, and iconic packaging. Made with a unique blend of piquin and arbol peppers that complements a wide array of global cuisines, Cholula’s generations-old secret recipe allows consumers to deliciously personalize their food without adding any fat, calories, or carbohydrates.

L Catterton’s acquisition will allow Cholula to become a truly standalone enterprise, and will enable the company to continue delivering on its potential to become a powerful and enduring global brand.  As the hot sauce category continues to expand, and as a result of the brand’s particular resonance with Millennial and Hispanic consumers, Cholula is uniquely positioned to broaden its distribution around the world both on shelves and in restaurants.

“Cholula represents a compelling opportunity to invest in a premium brand with an established reputation for quality and authenticity in the growing hot sauce category,” said Scott Dahnke, Global Co-CEO of L Catterton. “We look forward to partnering with Cholula’s talented management team to capitalize on the brand’s immense whitespace opportunity in the years to come.”

“It has been a privilege to pursue this unique opportunity on a proprietary basis. We are honored to be entrusted with the next chapter in Cholula’s evolution, and we are incredibly excited about the possibilities that lie ahead for the brand,” added Matt Leeds, Principal at L Catterton.

L Catterton has significant experience investing globally in CPG brands. Current and former CPG investments include The Honest Company, Kettle Brands, Zarbee’s, Home Chef, Ainsworth Pet Nutrition, Plum Organics, Odwalla, Beanitos, Ferrara Candy Company, and Sweet Leaf Tea, as well as other leading consumer brands such as Restoration Hardware, Peloton, Sandro/Maje, Caribou Coffee, and Equinox.

The transaction is subject to customary approvals and closing conditions, including anti-trust approval.  VACE Partners acted as exclusive financial advisor to Cholula, while Cravath, Swaine & Moore served as the Company’s legal advisor. L Catterton was advised by Kirkland & Ellis, Creel, McKinsey & Company, PwC, and Alvarez & Marsal.