Arca Continental acquires two snack businesses

by Eric Schroeder
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MONTERREY, MEXICO — Arca Continental, S.A.B. de C.V., the second-largest Coca-Cola bottler in Mexico and Latin America and the producer and distributer of Bokados brand snack foods, has acquired two snack food businesses: Wise Foods, Inc., Berwick, Pa., and Industrias Alimenticias Ecuatorianas (Inalecsa), Ecuador. Terms of the transactions were not disclosed.

Arca acquired Wise Foods from affiliates of New York-based private investment firm Palladium Equity Partners, L.L.C. Palladium purchased Wise Foods in 2000 for $96 million. Founded in 1921, Wise Foods makes and sells salty snacks on the eastern seaboard of the United States. The company is best known for its potato chips, but it also offers other salty snack products, including cheese snacks, popcorn, tortilla chips and corn chips. The company’s brands include Wise Potato Chips, New York Deli Kettle Cooked Potato Chips, Ridgies Potato Chips, Cheez Doodles and Dipsy Doodles Corn Chips.

Wise Foods’ products are distributed via a system of independent distributors and five company-owned distributor branches. The company has approximately 850 employees and produces nearly 40,000 tons per year.

Arca said the acquisition of Wise will expand its current operations and strengthen marketing capabilities in its related businesses in the United States.

Inalecsa, meanwhile, started operations in Ecuador in 1972 and is a leading company in its industry, with a wide national footprint as well as exports to Europe. The company is known for its salty, sweet and savory snacks, with brands such as Inacake, Tigreton, Tortolines, Riskos and Tornaditos.

Inalecsa has two production centers in Guayaquil and Quito, with more than 400 employees that produce close to 8,000 tons of products per year.

Arca said the investments in the snack foods sector strengthen its presence in both regions and expands its snack business, which operates in Mexico under the brand Bokados, the third-largest in the country. The combination of Wise Foods and Inalecsa with Arca’s business is expected to result in net sales of approximately $400 million in 2013, Arca said.

“The integration of Wise Foods and Inalecsa reinforces our confidence in this segment of the snack industry as an important vehicle for creating value for our shareholders, in areas that are highly complementary to our core business,” said Manuel L. Barragan Morales, chairman of the board of directors of Arca Continental.

Francisco Garza-Egloff, chief executive officer of Arca, added, “These transactions also increase our company’s presence and competitiveness in both markets, thereby enabling us to develop new growth opportunities in the territories we serve. Both provide a solid platform that will bring innovation to our portfolio, product and brand expansion as well as beneficial synergies and the sharing of best practices.”
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