Israel’s Frutarom was acquired by IFF last year in a deal worth $7.1 billion.
Frutarom will pay $2 million to acquire the remaining 5% of Canadian flavours producer Les Ingredients Alimentaires BSA.
It follows Frutarom’s $35.6 million buyout of an initial 95% stake in BSA in May 2015. By acquiring the balance in BSA, Frutarom will gain further access to unique and innovative savoury taste solutions including seasoning blends and functional ingredients for the food industry, with particular focus on the areas of processed meats and convenience foods.
The $2 million price means that the Israeli company has paid nearly 7% more per share to acquire the remaining 5% stake than it did for the 95% two years ago.
Frutarom president and CEO Ori Yehudai explained: “Frutarom sees great strategic importance for rapid growth in the field of savoury flavours, in which it now holds a leading market position, and is focused on developing unique, innovative, natural and healthy products with high added value at its sites throughout the world.
“The global market for savoury flavours is growing due to the rise in standard of living and changes in lifestyle and consumer habits, bringing about increased demand for processed and convenience foods both for home consumption and for eating out. Frutarom embarked about ten years ago on a strategic course of action to significantly build up its global savoury activity by acquiring leading companies in their fields, possessing unique solutions and a strong position in strategic target markets.”
BSA operates a vast production site in Montreal and employs around 150 staff.
Since the initial acquisition, BSA has exhibited double-digit growth along with significantly improved profitability margins. It has ‘greatly strengthened’ Frutarom’s position in savoury flavours in North America.
BSA is based in Montreal, Canada. © Google
“We are pleased with the success of the BSA acquisition, which has contributed to significantly strengthening our presence in the field of savoury taste solutions in Canada and North America,” Yehudai continued. “The acquisition materially strengthened the technological capabilities, the product portfolio we offer our customers, and our broad local and global customer base. BSA is one of the leading local manufacturers in the Canadian market and, as we expected, the combination of a leading local manufacturing company with the support of a global company like Frutarom has strengthened our market leadership and accelerated the pace of our profitable internal growth.
“Since the acquisition, BSA has demonstrated fine rates of growth in sales while significantly improving its profit margins, and we intend to continue exploiting and combining BSA’s R&D and sales and marketing platform in Canada and the markets of the region with Frutarom’s global R&D and sales and marketing platform in order to leverage and fulfill the abundant cross-selling opportunities between those activities.
“We are working on seeking out and executing additional strategic acquisitions of companies in our fields of activity, with special focus on high-growth markets, and we have a strong pipeline of potential strategic acquisitions. We will continue carrying out our rapid profitable growth strategy, which is based on 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 2020