Frutarom has continued its series of acquisitions by purchasing 51% of Israeli company Turpaz Perfume and Flavor Extracts.
The agreement sees Frutarom pay $4.1 million for the shares and a further $7.6 million into the company, which it values at $15.1 million.
The deal includes an option for the purchase of the remaining balance of Turpaz shares starting about four years from the date of completion of the transaction, at a price based on Turpaz’s business performance.
Turpaz’s sales turnover for the 12 months ending in June 2017 was approximately $6.2 million, with higher profitability than Frutarom’s flavours division, into which it will be consolidated.
Turpaz began its activities in 1970 and engages in the development, production and marketing of fragrance solutions. With 16 employees, it has a research and development, manufacturing and marketing site in Israel, and recently opened a facility in the US state of New Jersey.
The company will join Frutarom’s small existing fragrances businesses situated mainly in India, Africa and Latin America.
Frutarom president and CEO Ori Yehudai believes the acquisition marks an important step to develop Frutarom’s global fragrance business.
“We see interesting and diverse growth opportunities for fragrances, especially in emerging markets, and the potential to perform acquisitions of companies with combined flavour and fragrance activities, including in countries where Frutarom is already active, with the potential to realise interesting operational synergies,” he said.
“In the past we would forgo opportunities to acquire companies whose main activity was fragrances and with just a smaller amount in flavours. In the framework of our recent strategic decision to develop a global fragrances business, we can now move forward with such acquisitions as well.
“We are happy to disclose that we have an interesting pipeline of acquisitions in fragrances which we are pushing forward.”
The deal marks the seventh acquisition that Frutarom has made this year. Since 2015, it has acquired 26 companies.
Yehudai added that in order to reach the company’s target of $2 billion in sales by 2020, it will continue carrying out its growth strategy, which includes combining profitable internal growth with strategic acquisitions.
© FoodBev Media Ltd 2019