Frutarom has signed an agreement for the purchase of 100% of the shares of UK company Flavours and Essences (F&E) for approximately $19.5 million (£15 million).
Frutarom has signed an agreement for the purchase of 100% of the shares of UK company Flavours and Essences (F&E) for approximately $19.5 million (£15 million) and a mechanism for future consideration based on F&E’s future business performance over the period of three years from the purchase date.F&E’s sales turnover for the 12 months ending in July 2017 totalled approx.$7.4 million (approx. £13.7 million) and it registered an average annual rate of growth for the past five years of over 20%.F&E, which was founded in 1998, engages in the development, production and marketing of flavours and natural colours. F&E operates a production site and R&D centre in Blackburn, England, employs 41 people, and has a broad customer base in Europe, particularly in the UK and Ireland. F&E’s activity is said to be synergistic with Frutarom’s activity in the field of flavours, activity which has grown in recent years by rates considerably higher than the market rate of growth, as well as with Frutarom’s developing activity in the field of natural food colours."This is another acquisition of activity in Frutarom’s core field which will enable us to offer our customers a wider portfolio of solutions,” said Ori Yehudai, President and CEO of Frutarom. “This acquisition is further reinforcement for our growing activity in the UK where Frutarom holds a leading position in flavors. Frutarom will drive at exploiting to the utmost the cross selling opportunities inherent in this acquisition and will work towards expanding the product portfolio to F&E’s existing customer base. In addition, Frutarom will take measures to achieve maximum commercial and operational efficiency from merging F&E’s activity with its own activity in the UK.”"The F&E acquisition is a continuation of the implementation of Frutarom’s rapid and profitable growth strategy and the realization of its vision 'to be the preferred partner for tasty and healthy success.' This is the fifth acquisition we have made this year after having acquired Unique Flavors in South Africa, the French flavors company René Laurent, the Vietnamese flavors company WFF, and acquiring SDFLC of Brazil with its flavor solutions for ice creams and desserts. Since 2015 we have already acquired 24 companies which have been integrated into our global activity and have been and will continue contributing to further growth in sales and improved profits and margins through maximal capitalization on the synergies they bring. We are working at identifying and executing further strategic acquisitions of companies and activities within the range of our operations. We will continue carrying out our rapid profitable growth strategy, which is based on combining profitable internal growth and strategic acquisitions, in order to achieve the targets we recently set: sales of at least US$ 2 billion with an EBITDA margin of over 22% in our core activities by the year 2020.”