Frutarom has acquired the remaining 20.92% stake in Spanish plant extracts company Nutrafur for $2.36 million.
It adds to the initial 79% stake that Frutarom acquired in Nutrafur in September 2015, and continues the company’s ‘aggressive’ pursuit of growth. The deal is the seventh for the Israeli company in the last 12 months and its fourth buyout of 2017, following deals for WFF in Vietnam, René Laurent in France and Unique Flavors in South Africa.
Based near Murcia in southern Spain, Nutrafur manufactures a range of speciality plant extracts, many with antioxidant properties or scientifically proven healthy qualities. They include extracts of rosemary, olive and citrus fruits that are used in formulations for food and drink – as well as in other sectors – plus antioxidants for preserving food and extending shelf life.
Nutrafur has an R&D and sales centre, as well as ‘an efficient manufacturing site’ with large production capacity, in Murcia. Frutarom said that it was working to realise ‘considerable expansion’ to the facility while investing in the site to grow capacity further.
The addition will ‘substantially strengthen’ Frutarom’s activity in antioxidants, following the acquisitions of Vitiva and Ingrenat in 2015.
Frutarom president and CEO Ori Yehudai said: “Over the past two years Frutarom has made a major leap forward in strengthening its position as a leading global producer of natural speciality ingredients by acquiring Vitiva, Ingrenat, Nutrafur and Extrakt-Chemie while deepening and expanding our activity in the growing field of natural extracts from plants and antioxidants for food products. We will continue investing in the significant expansion of our global activity in this important and growing field, both through strategic acquisitions and in collaboration with universities, research institutes and startup companies in developing innovative products.
“We are pleased with the Nutrafur acquisition which has brought Frutarom advanced R&D capabilities along with a top-level and experienced managerial team, as well as substantial customers. The acquisition paved the way, in accordance with our plan, for improvement in our flexibility and operational efficiency. Since we are making further investments at the company’s site to expand production capacity, we completed the purchase of the balance of holdings in the company such that today we own 100% of its share capital.
“We have an excellent pipeline of future acquisitions which, together with our continuing rapid and profitable internal growth, will enable us to achieve the target we set for ourselves of at least $2 billion in sales with an EBITDA margin of over 22% in our core activities by the year 2020.”
Frutarom said that its buyout of Nutrafur was part of an overall move to expand activity and capacity in natural plant extracts by optimising and streamlining production.
The company has already realised a significant increase in capacity since its acquisitions of Vitiva, Ingrenat and Nutrafur. This has allowed it to streamline its operations, including the closure and sale of the Frutarom plant in North Bergen, New Jersey. Activity from that site has been transferred to other Frutarom plants, and the business is ‘taking steps’ to increase capacity at Vitiva and Ingrenat’s existing sites.
Taken hand-in-hand with its acquisition of Extrakt-Chemie last year, the changes will contribute to significant improvements in Frutarom’s cost structure and competitiveness in the field of natural plant extracts, which is at the heart of Frutarom’s strategy for growth.
They are expected to deliver savings of around $6 million on an annual basis, which will begin to be reflected in Frutarom’s results during the second half of 2017.
© FoodBev Media Ltd 2018