Frutarom acquires IFF's fruit base business in Germany and Switzerland
The business area includes the manufacture of fruit and other natural raw materials that are used in a variety of food products, including baked goods, dairy products, etc.
The purchase price of the business acquired in Germany and Switzerland amounts to EUR 30 million (US $ 36.5 million). Certain liabilities are deducted from this amount.
The purchase agreement allows for an adjustment mechanism based on the results of the acquired business in 2005 and 2006. According to this mechanism, the purchase price can be adjusted upwards or downwards by a maximum of EUR 3.5 million.
Ori Yehudai, President and Chief Executive Officer of the Frutarom Group commented: "The successful completion of these purchase negotiations marks another milestone and brings Frutarom one step closer to its goal of US $ 300 million in sales and one of the top ten most important and leading multinational companies To become a company in the aroma and fragrance industry. " Yehudai also stated: "We are extremely pleased about the acquisition of IFF's fruit base business in Germany and Switzerland. The acquisition is a further step in Frutarom's corporate strategy of developing through targeted acquisitions and through organic growth that is above average in the industry." It is expected that this business area will contribute significantly to increasing the sales of the Frutarom Group as well as increasing profits. Frutarom intends to use the acquisition to strengthen its position as the world's leading provider of comprehensive natural solutions for the food industry and for leading food manufacturers. This also includes a wide range of innovative products for the functional food industry. It is also expected that, thanks to the takeover, Frutarom's activities in the field of spicy flavors will be further strengthened.
In addition to the takeover of Emil Flachsmann AG (a Swiss company) last year, the acquisition of the fruit base business will further expand the existing customer base of the Frutarom Group and bring numerous new customers to the group, who are among the leading multinational food manufacturers in their field of activity, mainly in the Western European market. The takeover of the fruit base business includes activities in countries and regions in which Frutarom was previously less active, for example in Spain, Italy and Norway as well as in North Africa. Frutarom intends to expand its fruit base business to other regions such as North America, Eastern Europe and East Asia.
Frutarom will also be able to benefit from the additional approximately 190 experienced and efficient employees at all levels of the company when it comes to personnel issues. The experienced management of the fruit ingredients business will be integrated into the global Frutarom management team and the experienced professionals in research and development as well as sales and marketing will also be integrated into Frutaroms' global structure.
Yehudai added: "We are convinced that there is a pronounced synergy potential between the new business field of fruit ingredients and the existing activities of the two Frutarom divisions" Flavors "and" Fine Ingredients ", which will allow us to combine the two business fields to create the greatest possible value. "
With the signing of the letter of intent in May of this year, negotiations between IFF and the French works council began regarding the potential purchase of the French basic materials business by Frutarom. Provided that the transactions go as planned, Frutarom intends to integrate the fruit base production in France into the production facilities acquired in Germany and Switzerland in order to significantly reduce costs and at the same time use the existing synergies between the activities in the three locations. This also includes the synergies between the acquired business and the previous area of activity of Frutarom. The research and development as well as the sales and marketing activities for the French market would remain in France, as Frutarom intends to expand its activities there on a large scale.
Last week Frutarom announced top results in both the second quarter and the first half of 2004. In the first six months of the year, Frutarom sales rose to US $ 88.5 million, a growth rate of 46.3% compared to the first half of 2003. Operating profit increased 66.0% to US $ 12.3 million and net income increased significantly by 90.6% to US $ 9.3 million. The net margin also rose to 10.5%.
Background information about the company
Frutarom is a multinational company with major production and development centers on three continents. The company markets its products in 85 countries around the world. The Frutarom products are developed for the following industries: Food, Beverages, Flavor, Fragrance, Pharmaceuticals, Nutraceuticals, Functional Foods, Food Supplements and Cosmetics.
Frutarom has two company divisions:
- The "Flavors" division, which develops, manufactures and sells flavors and spice blends.
- The "Fine Ingredients" division, which develops, manufactures and sells raw materials for the production of the same flavors and fragrances as well as plant extracts, medicinal plant extracts and natural products.
Frutarom is also extremely active in the field of innovation, for example in the ArtChem business area in which raw materials for applications in the pharmaceutical industry (digestive agents) are produced using biotechnological methods.
Frutarom employs 800 people worldwide. Frutarom products are manufactured in manufacturing facilities in the United States, Great Britain, Switzerland, Israel, Denmark, China and Turkey. The company's international marketing organization has branches in Israel, the United States, Great Britain, Switzerland, Germany, Denmark, France, Hungary, Romania, Russia, Ukraine, Kazakhstan, Belarus, Turkey, Brazil, Mexico, China, Japan, Hong Kong and India. Frutarom also works with local agents and
Distributors all over the world together.
On the Internet: www.frutarom.com
Source: Tel Aviv [frutarom]
