Hagelin is Frutarom’s third acquisition in a month, and Fourth strategic acquisition this year. The acquisition reinforces its presence in the US and in the fast growing markets of Latin America and Africa.
Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; Bulletin Board: FRUTF) has acquired US flavors company Hagelin & Company Inc. and its affiliate BRC Operating Company LLC for $52.4 million in cash. The acquisition was made through Frutarom USA and was financed by a short-term bank loan.
Frutarom , one of the world’s ten biggest companies in the flavors and fine ingredients industry continues to implement its rapid and lucrative growth strategy and announced its fourth acquisition this year of Hagelin.
Hagelin, established in 1967 and employs a staff of 84, is engaged in the development, production and marketing of flavors and unique flavor technologies for the food industry, with an emphasis on the growing sector of beverage flavors. Hagelin’s sales turnover totaled $24.2 million in 2012, up 7% from 2011.
Hagelin has salient competitive advantages and, among others, specializes in the development of advanced flavor solutions for the reduction of salt, sugar and calories and improvement of the taste experience. This acquisition expands Frutarom’s global range of advanced products and technologies, which also covers soft drinks, functional drinks (which offer nutritional value), alcoholic beverages, and savory solutions (the non-sweet spectrum).
Hagelin’s customer base includes leading international food and beverage manufacturers and local food and beverage manufacturers in the US, the UK, and in developing markets such as Central and South America and Africa, which have experienced high growth rates. This acquisition is expected to expand Frutarom’s customer base, while creating many cross-selling opportunities.
Hagelin’s robust and experienced executive team will join and contribute to Frutarom’s US management.
Hagelin has three R&D, production and marketing sites, two of them in the US (in New Jersey and in Georgia), and one in the UK. Hagelin’s business is largely synergistic to that of Frutarom in the US, which has grown significantly in recent years (43% in 2012) from a combination of rapid and profitable organic growth and acquisitions. Frutarom has three production sites in the US as well as production sites in the UK and it will strive towards capitalizing on synergies.
This acquisition strengthens Frutarom’s foothold in the US market, which is the world’s biggest flavor market, and accelerates its penetration into the developing and fast growing markets of Central and South America and Africa, which are of high strategic importance to Frutarom. This acquisition substantially expands Frutarom’s business activity in the growing and profitable beverage flavors sector. Frutarom has thus completed four acquisitions in 2013, with a total sales turnover of $147 million in 2012, investing a total of $120 million.