12th Israeli Frutarom’s acquisition for 2015

Buys Hong Kong based companies Inventive Technology Ltd. and Prowin International Ltd. for $17 million

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

Israeli Frutarom Industries Ltd.,  one of the world’s 10 largest companies in the field of flavors and specialty fine ingredients, has acquired Hong Kong based companies Inventive Technology Ltd. and Prowin International Ltd.  for US$17 million. The purchase agreement includes a mechanism for future consideration conditional on the company’s business performance over the three year period following the acquisition. The transaction was financed using bank debt.

Inventive was founded in 1998 and engages in the development, manufacture and marketing of flavors and unique technologies for combining flavors with fruit components, chocolate, grains and nuts in many food products, particularly dairy products, ice creams, pastries and beverages.

In the 12 months ending October 2015 sales for Inventive reached US$13.7 million. Inventive has manufacturing, research and development, and marketing facilities at Zhàoqìng in southern China where it has excess production capacity, as well as an R&D and sales center in Shanghai and sales and marketing offices in Hong Kong.

The company has a broad customer base which includes blue-chip global food and beverage makers along with leading Chinese food and beverage manufacturers, and its products are sold in China, Southeast Asia, the Middle East and South America. The company’s management maintains excellent long-lasting relationships with these leading customers and Frutarom will make use of these ties to capitalize on the abundant and varied cross-selling opportunities.

Ori Yehudai, President and CEO of Frutarom Group, said: “The acquisition of Inventive is the continuation of Frutarom Group’s implementation of its rapid growth strategy and the realization of its vision ‘to be the preferred partner for tasty and healthy success.’

“We have made it a main goal to expand our activity in the emerging markets of China and Southeast Asia with their high rates of growth, both through internal growth and by means of acquisition. The acquisition of Inventive is another important step towards attaining this goal.

“Growth rates for processed food consumption in China continue to be high and stem from the urbanization of Chinese society, the entry of women into the workforce, and changes in the lifestyle and spending habits of the Chinese consumer. Processed food consumption in China is projected to surpass that of the United States in 2015 while the average Chinese consumer consumes just around one quarter of the processed food consumed by the average American consumer, so the potential for continued growth is quite strong, ” said Mr. Yehudai.

“Construction was recently completed on our modern advanced Chinese plant, with its state-of-the-art laboratories for development and applications, which will provide us for the first time the ability to develop and produce savory flavoring solutions locally in China, and we are convinced that our new plant will contribute towards taking a leap forward in our activities in China and Southeast Asia which constitute target markets for growth and for leveraging our competitive advantages, ” continued Mr. Yehudai.

“The acquisition of Inventive is the twelfth acquisition we have made this year, and we are continuing to seek out and perform further strategic acquisitions of companies and operations in our fields of activity while strengthening our position as a leading global player in the field of natural solutions for taste and health, ” Mr. Yehudai concluded.

 

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