Israel’s Frutarom was acquired by IFF last year in a deal worth $7.1 billion.
Frutarom has acquired all of UK company Flavours & Essences (F&E) for $19.5 million.
F&E, which was founded in 1998, produces a range of flavours and natural colours for use in the food industry. It operates a production site and R&D centre in Blackburn, employs 41 people, and has a broad customer base across the UK, Ireland and mainland Europe, Frutarom said.
According to F&E’s management reports, its sales for the year to July totalled approximately $17.4 million, and on average it has registered an annual rate of growth in excess of 20% over the past five years.
The deal comes after Frutarom’s CEO, Ori Yehudai, told FoodBev that the company had around 200 acquisition targets, including at least 20 deals in the immediate pipeline, and said he was optimistic that some of the negotiations would come off during the second quarter.
He also said that many food manufacturers were looking to make the switch to more natural products but were put off doing so by the cost.
Frutarom president and CEO Ori Yehudai said: “This is another acquisition of activity in Frutarom’s core field, which will enable us to offer our customers a wider portfolio of solutions. This acquisition is further reinforcement for our growing activity in the UK, where Frutarom holds a leading position in flavours.
“Frutarom will drive [towards] exploiting to the utmost the cross-selling opportunities inherent in this acquisition and will work towards expanding the product portfolio to F&E’s existing customer base. In addition, Frutarom will take measures to achieve maximum commercial and operational efficiency from merging F&E’s activity with its own activity in the UK.”
Talking to FoodBev in July, Yehudai said that Frutarom had improved its efficiency in a number of countries by better integrating the operations of newly acquired ingredient companies with the rest of the Frutarom group. He pointed to Stuttgart, where the company closed down a production site following the acquisition of Wiberg, helping it to realise cost savings and become more efficient.
There is no suggestion that Frutarom intends to close F&E’s Lancashire factory.
Read the full interview
Ori Yehudai discusses Frutarom’s acquisitions pipeline, its ‘aggressive’ strategy for short-term growth and how it is reacting to the demands of consumers. Read more…
Yehudai continued: “The F&E acquisition is a continuation of the implementation of Frutarom’s rapid and profitable growth strategy and the realisation of its vision ‘to be the preferred partner for tasty and healthy success’. This is the fifth acquisition we have made this year, having acquired Unique Flavors in South Africa, the French flavours company René Laurent, the Vietnamese flavours company WFF, and acquiring SDFLC of Brazil with its flavour solutions for ice creams and desserts.
“Since 2015, we have already acquired 24 companies, which have been integrated into our global activity and have been and will continue contributing to further growth in sales and improved profits and margins through maximal capitalisation on the synergies they bring. We are working at identifying and executing further strategic acquisitions of companies and activities within the range of our operations. We will continue carrying out our rapid profitable growth strategy, which is based on combining profitable internal growth and strategic acquisitions, in order to achieve the targets we recently set: sales of at least $2 billion with an EBITDA margin of over 22% in our core activities by the year 2020.”
© FoodBev Media Ltd 2019