Speciality ingredients producer Innophos has agreed to acquire a US-based provider of dietary supplement ingredients for $125 million.
Novel Ingredients supplies botanicals, proteins, amino acids and a range of other health ingredients for use in the food and nutrition spaces. It turned over of nearly $100 million last year, with compound annual growth of 19% between 2008 and 2016.
It is being sold by New York-based private equity firm GenNx360 Capital Partners.
Innophos president and chief executive officer Kim Ann Mink said: “The acquisition of Novel Ingredients is an exceptional opportunity for our company and a significant step forward in achieving our strategic goals. This transaction fully aligns with our Vision 2022 strategic priorities to grow our food, health and nutrition portfolio, increase our presence in attractive nutrition end-markets, and develop innovative solutions that better serve our customers.
“Additionally, it will more closely align Innophos with important consumer mega-trends such as health and wellness, energised ageing and clean labels.”
The deal includes Novel Ingredients’ strategic sourcing and 40,000-square-foot manufacturing facility in East Hanover, New Jersey, from where it supports production of more than 185 different ingredient solutions. It employs around 100 staff.
Novel Ingredients operates a manufacturing site in East Hanover, New Jersey – less than 1,000 feet from Mondelēz’s global headquarters.
According to Innophos, the acquisition will deliver annual cost synergies of around $4 million – with further value from tax synergies and revenue synergies – and will turn its food, health and nutrition platform into a near $500-million-a-year operation.
The deal is expected to close in the third quarter of the year.
Mink continued: “Bringing Novel Ingredients and Innophos together will create a food, health and nutrition platform of nearly $500 million in revenue, representing 60% of our total combined company. The combined company will benefit from leading, innovative technology; a broader and deeper product portfolio; and access to new market segments.
“In addition to the complementary products and manufacturing assets that we gain, we are acquiring Novel Ingredients because of its experienced and dedicated people. They bring to Innophos deep customer relationships, exceptional knowhow in ingredient development, solutions and applications, along with proven quality assurance and customer service skills.
“We are confident that this acquisition will create lasting, long-term value for our shareholders. We expect to move quickly to attain cost synergies, while nurturing the entrepreneurial and customer-focused spirit of Novel Ingredients. On behalf of the Innophos organisation, I would like to welcome the Novel Ingredients employees to our team.”
And Novel Ingredients chief executive officer Rick Antonoff concluded: “We are delighted at the prospect of becoming part of Innophos. We believe that joining the Innophos team will enable Novel Ingredients to deliver enhanced value to our existing customers, and will present exciting opportunities to expand our business into new market adjacencies. We look forward to working closely with the Innophos team to ensure a smooth transition.”
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