Frutarom’s Nineth Acquisition in Two Years: Acquires Two European Companies for More Than $10 Million

Ori Yehudai,   President and CEO of Frutarom Group

 

World’s top 10 companies for flavors and specialty fine ingredients, the Israeli Frutarom Industries Ltd. (OTCBB:FRUTF) (TASE:FRUT), continues to implement its rapid growth strategy by acquiring the Spanish company Ingrenat (Ingredientes Naturales Seleccionados) for apporoximately $8 million, plus up to $1.1 million (€ 1 million) additionally, depending on Ingrenat’s 2015 performance.

Ingrenat Deals in Natural Plant Extracts which include, among others, paprika rosemary, bixin, alfalfa and more which deliver taste, color, and antioxidant activity solutions for the food industry.

Ingrenat’s sales grew 10% in 2014 to approx. US$ 9.8 million (€ 7.4 million). The value of its net assets (not including cash or debt) in 2014 stood at US$ 6.9 million (€ 5.6 million). Ingrenat’s operations will be integrated into the activities of Frutarom’s Specialty Fine Ingredients division with which it shares similar profitability margins. The acquisition will be funded through bank financing.

The natural food colors activity joins the natural colors activity of Montana Food which was acquired in September 2014, and of Vitiva for which the purchase agreement was signed in December 2014. Ingrenat’s activity in antioxidants based on natural substances, particularly in the field of food preservation and protection and extension of shelf life, further reinforces Frutarom’s line of solutions in this area which also gained a substantial boost with the acquisition of Vitiva which has activity as well in this growing field.

Ingrenat has 28 employees, an R&D and sales and marketing center, and a production site in Murcia, Spain with large production capacity and the possibility of extensive expansion, of which Frutarom will look to gain full advantage and achieve significant operational savings.

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Frutarom also acquired 100% of British Flavors Maker FoodBlenders which Develops, Manufactures and Markets Savory Solutions, for about US$ 2.4 million (£ 1.6 million) plus an additional sum expected to stand at about US$ 600, 000 (£ 400, 000), depending on the company’s performance. The transaction was completed upon signing and is being independently financed.

In 2014 FoodBlenders posted sales of approximately US$ 3 million (£ 2 million) with profit margins similar to those of Frutarom in the same area of activity.

Established in 1998, FoodBlenders develops, manufactures, and markets savory solutions which mainly include spice and seasoning mixes, functional ingredients, marinades and sauces for the food industry, with particular emphasis on the convenience foods segment.

In 2014 FoodBlenders posted sales of approximately US$ 3 million (£ 2 million) with profit margins similar to those of Frutarom in the same area of activity. Food Blenders have a site in England close to Frutarom’s Wellingborough site, and it has a wide customer base which includes British food and private label manufacturers.

FoodBlenders’ product line and technologies complement the product portfolios and activities of UK-based Savoury Flavours and EAFI which were acquired by Frutarom in 2012 and 2011 respectively and which also specialize in savory flavor solutions. The two companies promise to generate synergies between FoodBlenders’ activity and Frutarom’s expanding savory activity in the UK and throughout the world.

Ori Yehudai, President and CEO of Frutarom Group, remarked: “This is an additional acquisitions of activity in Frutarom’s core field of business that will enable us to offer our customers a broader set of solutions”.

Mr. Yehudai added: “The global savory flavors market is growing as a result of the rising standard of living and way of life and the accompanying changes in consumer habits which are boosting demand for processed and convenience foods. Frutarom considers the field of savory flavors a vital strategic growth engine and invests heavily in developing unique innovative products with high added-value at its sites throughout the world. Acquiring FoodBlenders following the previous acquisitions in this segment is another step in establishing Frutarom’s leadership in this important area, and we intend to continue investing towards significantly expanding our savory activity in other countries around the world, including through further acquisitions.”

Mr. Yehudai concluded by saying: “We are continuing to implement our rapid and profitable growth strategy combining internal growth and strategic acquisitions. The acquisition of FoodBlenders is our second acquisition of the year and follows the completion of three acquisitions in 2014, including that of Vitiva in Slovenia this past December. We are looking to identify and carry out further strategic acquisitions of companies and activities in our fields of operation, placing particular focus on markets and areas of activity exhibiting high rates of growth.”

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