Heinz takes 3Q charge for Foodstar payment
PITTSBURGH -- H.J. Heinz Co. said that an early payment to a company it bought a Chinese soy sauce maker from in 2010 will hurt its fiscal third-quarter earnings by 4 cents per share.
The Pittsburgh-based ketchup maker acquired Foodstar, which manufactures Master brand soy sauce and fermented bean curd in China, from Transpac Industrial Holdings Ltd. for $165 million. Part of the deal required a payment, known as an earnout payment, in 2014 if Foodstar performed well under Heinz.
Heinz said Wednesday that it paid Transpac $60 million, 20 percent higher than expected, based on Foodstar's performance. Both companies agreed on an early payment, Heinz said.
"Foodstar has delivered excellent results and has performed well beyond our expectations since joining Heinz. The business has grown to well over $200 million in sales," said Heinz CEO William R. Johnson in a press release.
Foodstar has five factories in China, including a soy sauce factory in Shanghai.
Heinz shares rose 14 cents to $60.28 in morning trading Wednesday.