Castillo Hermanos strikes $1.5 billion deal to buy U.S. maker of SunnyD, sources say

NEW YORK, April 3 (Reuters) - Guatemalan conglomerate Castillo Hermanos is buying U.S.-based Harvest Hill, maker of beverages such as SunnyD, for around $1.5 billion, including debt, according to people familiar with the matter.

The deal is expected to be announced later on Thursday, the sources said, requesting anonymity because the terms of the transaction are confidential.

Private equity firm Brynwood Partners launched the Harvest Hill platform in 2014 with its acquisition of Juicy Juice from Nestlé USA, Inc., and since then it has added eight other beverage brands, including Daily's Cocktails and energy drink Nutrament, to the platform.

Founded in 1886, Castillo Hermanos is a large, family-owned company based in Guatemala. It manufactures food and beverage products such as the Famosa beer brand, and owns several other assets across Central America.

Brynwood Partners, Centerview Capital, Harvest Hill, and Citi did not immediately respond to requests for comment. Castillo Hermanos could not be reached for comment.

A deal for Harvest Hill would allow Castillo Hermanos to diversify outside of Central America, and bypass tariffs to introduce its own products to more U.S. consumers by making them at Harvest Hill's manufacturing facilities. Harvest Hill, based in Stamford, Connecticut, has several manufacturing facilities across the country.

The Trump administration on Wednesday announced reciprocal tariffs on several countries, some of which are in Latin America. It already had imposed 25% tariffs on Mexican goods.

Castillo Hermanos, which will be the majority owner of Harvest Hill, is partnering with US consumer-focused investment firm Centerview Capital on the deal. Jim Kilts, a former Procter & Gamble executive and consumer industry veteran, launched the firm in 2006.

Other Latin American firms have partnered with U.S. investors to acquire U.S. food and beverage companies in recent years. Last year, Bia Foods, the investment arm of Guatemalan conglomerate Grupo Mariposa, partnered with US merchant bank BDT & MSD Partners to acquire U.S.-based Badia Spices for around $1.2 billion, Reuters reported.

Based in Greenwich, Connecticut, Brynwood Partners is a consumer-focused investment firm that manages more than $1 billion of capital.

Citigroup ( C/PN ) was the sole financial advisor to the buyer group and led the financing for the deal.

The Wall Street Journal reported the deal talks earlier on Thursday. (Reporting by Abigail Summerville in New York; Editing by Dawn Kopecki)