Frutarom’s Second acquisition in a week: Buys Canadian Savory Flavor Maker For $35 Million

Attached is a photo of Ori Yehudai,   President and CEO of Frutarom Group (Photo by Adi Lam)

Israel based Frutarom Industries Ltd. become one of the world’s 10 largest companies in the field of flavors and specialty fine ingredients by implementing its rapid growth strategy. Today the company announced its fifth acquisition this year, and the second in one week, of 95% of the share capital of Investissements BSA Inc. for about US$35.6 million.

The purchase agreement provides for the acquisition of the remaining balance of shares starting two years from now at a price conditional on the company’s business. The transaction is being financed using bank debt and will be completed within the next few weeks.

BSA founded in 1989 by Mr. Marcel Baril, has a large production site in Montreal and employs around 140 people. BSA’s main activities include the non-sweet spectrum of flavors, that include seasoning blends and functional ingredients with particular focus on the areas of processed meats and convenience foods. BSA sales in 2014, approximately USD 34 million.

In addition to its North American operations, in recent years BSA has developed an interesting operation in India in which it holds a 90% stake, with 10% owned by a local partner who manages its activity. The company in India has local production facilities and supplies customers in the Indian market with savory flavor solutions, and also assists the group in procuring raw materials in source countries. BSA’s activity in India will contribute towards strengthening and securing Frutarom’s position in the growing Indian market and joins the growing activity of the Indian company Sonarome whose acquisition was announced by Frutarom just several days ago.

The worldwide market for savory flavors is growing due to the rise in standard of living and lifestyle along with changes in consumer habits leading to higher demand for processed and convenience foods, both in home consumption and eating out. Frutarom considers the field of savory flavors an important strategic growth engine and in 2006 began substantially expanding in this field through the acquisition of the savory activities of the Nesse group, Gewurzmueller and Christian Hansen in 2006, 2007 and 2009 respectively, the acquisition of EAFI and the savory activities of Rieber and of FSI in 2011, the acquisition of Savoury Flavours in 2012, the acquisition of 75% of the Russian company PTI in 2013, and the acquisition of FoodBlenders in 2015.

Frutarom sees great importance for this field, in which now holds a leading position in Europe and invests heavily in developing unique innovative products with high added value at its sites throughout the world. The activity of BSA is synergetic to a large extent with Frutarom’s global savory activity and will enable Frutarom to reinforce its supply of products in the field of savory and to continue expanding and deepening its activity and market share in Canada, North America and in India.

Mr. Baril and the four partners currently running BSA successfully will continue in their management roles with the company, with some of them as shareholders as well.

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