- Goya Foods is considering its options, including a sale, and has hired investment bank Goldman Sachs to help with the process, sources told CNBC. The company sells a variety of Latin American food products including canned beans, olives and rice.
- The sources said Goya, which has about $250 million in earnings, could bring in $3 billion for a sale. Goldman Sachs has reportedly sent out financial materials to private equity firms and set a deadline of June for initial bids.
- Goya CEO Robert Unanue told CNBC the company is not for sale. "The future of Goya is to continue to build our family legacy and to grow the brand worldwide. For these reasons and many more, Goya is not for sale," he said in a statement.
Although Goya's CEO denies the company is exploring a sale, it is likely the company just isn't ready to publicly announce it yet. He told CNBC that all of this maneuvering is about estate planning for the family-owned company, but the actions seem to point to a more near-term decision. Sending financial information to private equity firms generally isn't part of estate planning.
The company may make a decision about a potential sale once initial bids come in. Regardless of what is happening with the company, a sale could be tempting given Goya's executive struggles. Goya has always been a family business. It was founded in 1936 by Spanish immigrants Prudencio Unanue and Carolina Casal. Robert Unanue, CEO since 2004, is the founders' grandson.
Despite the family ownership, the business has not always run smoothly. Some heirs to the company pushed Prudencio's son Joseph out of his leadership role in 2004. This dispute ended up in court, with Joseph unsuccessfully wanting to be reinstated. Joseph appealed in 2007, and died in 2013.
Although the family litigation is far in the past, those types of issues coupled with struggles in the CPG industry as a whole, could lead the family to weigh whether a sale makes the most sense. Family-owned food and beverage brands often struggle to stay independent in the fast-paced food space, where trends are constantly changing.
Big CPG companies have been acquiring more independent and family-owned businesses to add to their portfolio. That type of M&A helps big companies get into growing and trendy categories, like when Mondelez purchased Tate's Bake Shop and Kellogg bought RXBAR. Goya products are a staple for many Hispanic families, and became popular with all demographics of U.S. consumers as they became more interested in authentic ethnic food.
Sources told CNBC that Goya could bring in interest from private equity firms and many different large food companies, including J.M. Smucker, B&G Foods, Conagra, Unilever, Kraft Heinz and Campbell Soup. B&G has been on an acquisition spree for years, most recently picking up formerly family-owned Clabber Girl for $80 million. Goya could fit into its portfolio — which includes make-at-home Mexican staple Ortega and bean brand Joan of Arc — seamlessly. Buy Goya could also fit well in Conagra's portfolio, especially since the company acquired packaged Mexican food company Frontera for $108.9 million in 2016.
Goya's strong reputation and products certainly make it an attractive acquisition target. The company has been one of the largest Hispanic-owned food companies in the U.S. for years. Consumers crave ethnic food as international flavors have become more popular in recent years. Hispanic food, in particular, has become a larger focus.
For its part, Goya has been keeping up with the food trends and adapting. As part of a $500 million strategy to embrace the brand's cultural ties with the U.S. Hispanic population, the company expanded its portfolio in 2015 to include more organic offerings. It's a worthy demographic to target. The Census Bureau predicted the U.S. Hispanic population will hit 62 million by 2020. And a few years ago, Goya opened four new facilities and doubled the size of another one.
However, times have been difficult for the CPG industry, especially for food companies that rely on canned items. Today's consumers are more interested in fresher food. While dried beans are much more time consuming to cook, when looking at all canned items, beans — one of Goya's broadest segments — rank well below canned tomatoes, soups and tuna fish, according to 2018 statistics reported by the Canned Food Alliance.
Although Goya's business moves make it seem like the company has built itself to be strong enough not to be tempted to buyout offers, they also could make it a prime acquisition target.