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Roquette to acquire IFF Pharma Solutions in $2.85bn deal

Roquette's acquisition of IFF Pharma Solutions, which makes excipients, flavours, and functional ingredients, will strengthen its position in the health and nutrition markets, it says.

On 19 March 2024, Roquette, a plant-based ingredients and pharmaceutical excipients company, announced an acquisition agreement to buy IFF (International Flavors & Fragrances) Pharma Solutions in a deal reported to be worth $2.85 billion.

This strategic move is set to strengthen Roquette's global position in drug delivery solutions, as outlined by Pierre Courduroux, CEO of Roquette. “Today’s [19 March 2024] announcement is a decisive step in our journey to reinforce our position in the health and nutrition markets,” he said.

Roquette’s acquisition of IFF Pharma Solutions, which has a portfolio of excipients, flavours, and functional ingredients, comes on the heels of another acquisition just seven months prior.

In July 2023, Roquette announced an agreement to acquire Qualicaps, a subsidiary of the Mitsubishi Chemical Group. Japan-based Qualicaps is a producer of hard capsules for oral dosage solutions. An announcement from Roquette in October 2023 confirmed the completion of this acquisition.

Accelerating growth in health and nutrition

The acquisition will integrate IFF Pharma Solutions’ capabilities into Roquette’s portfolio, particularly in excipients for oral dosage forms. This alignment will enhance Roquette’s health and nutrition segments and accelerate its growth trajectory, it said.

Erik Fyrwald, CEO of IFF Pharma Solutions, emphasised the two companies' synergy, saying: “[...] This represents a great opportunity for our team and customers. Roquette is the ideal strategic partner for IFF Pharma Solutions, with whom it has complementary portfolio and innovation capabilities, and with whom it shares a culture of operational excellence.”

IFF Pharma Solutions, headquartered in New York, generated approximately $1 billion in revenue in 2023 and brings a substantial footprint, including ten global R&D and production sites.

The acquisition will bolster France-based Roquette's presence in the US and expand the company’s formulation and drug delivery capabilities. According to Roquette’s press release, the acquisition “turns the company into the pharmaceutical industry’s partner of choice for the development of innovative drug delivery solutions to best address current and future customer needs, and to improve patients’ lives”.

The transaction is anticipated to close in 2025

The transaction, pending regulatory approval, is expected to close in the first half of 2025.

Alongside health and nutrition, this acquisition is anticipated to significantly boost Roquette’s innovation and growth in the pharmaceutical sector.

Fyrwald said: “An important next step in our portfolio optimization strategy, the sale of Pharma Solutions, along with other recent actions such as our dividend rightsizing, represents a significant step towards our commitment to reducing debt leverage to 3.0x or below. This also enables us to increase focus on the core drivers of long-term profitable growth and maximize value for our shareholders.”

Fyrwald added that IFF Pharma Solutions is confident that partnering with Roquette will enhance its industry leadership by investing in innovation to meet the evolving needs of pharmaceutical manufacturers and developers globally.