FRUTAROM takes over Gewürzmüller

In 2006 Gewürzmüller achieved sales of around € 46 million - FRUTAROM established itself in its field as one of the 10 largest companies in the world - FRUTAROM continues its rapid growth strategy

Frutarom Industries Ltd. (LSE: FRUTq, TASE: FRUT, OTC: FRUTF) (“Frutarom”) announced that they have entered into an agreement to acquire 100% of the share capital of the German companies Gewürzmüller GmbH and Blessing Biotech GmbH (“Gewürzmüller” and “Blessing Biotech ”, together the“ Gewürzmüller Group ”) for a payment of USD 67 million (EUR 47,3 million) in cash. The takeover agreement also includes an earn-out clause for a later payment, so that the final total price for the takeover of the Gewürzmüller Group will be 7,1 times its 2007 EBITDA. The Group's total sales for 2006 were approximately USD 65 million (EUR 46 million). Frutarom financed the acquisition through long-term bonds.

Gewürzmüller was founded in 1896 by the Rendlen family (the seller) and is today a leading international group of companies with an excellent reputation. Gewürzmüller employs 190 people. The company develops, produces and sells unique and innovative spices, spice blends and functional ingredients for the food industry, especially for the meat processing industry and manufacturers of convenience food. Blessing Biotech develops, produces and markets starter cultures. These are natural products that are based on microbiological processes such as fermentation by microorganisms and enzymes and are used in the production of food, especially meat products, dairy products and baked goods. Starter cultures enable food manufacturers to significantly control the taste, color, texture and shelf life of their products.

The Gewürzmüller Group operates two production sites in Stuttgart, Germany. The main location, which was built two years ago, is modern and efficient and would be able to cope with a considerable expansion of production capacities. The plant also meets the strictest standards of the European food and beverage industry.

The Gewürzmüller Group has sales and marketing branches in 12 countries. Her broad customer base includes thousands of partly leading food manufacturers, especially from Eastern and Western European countries such as Germany, Austria, Switzerland, Sweden, Denmark, Russia, Ukraine and Bulgaria.

Ori Yehudai, President and CEO of the Frutarom Group, commented: "The acquisition of Gewürzmüller is another important step in the implementation of our strategy of rapid growth and brings us closer to our vision of" to be the preferred partner for tasty and healthy success " . As an important strategic acquisition, it strengthens our position as one of the ten largest global leaders in the aroma and fragrance industry. It also consolidates our presence and position as one of the leading suppliers of spice products in the world. The activities of the Gewürzmüller Group offer enormous potential for synergies. They will be integrated into the successful German company Nesse, which was taken over by Frutarom in early 2006, as well as into Frutarom's operations in Israel. The acquisition will significantly expand Frutarom's technological capabilities, its offering of functional and seasoning products to customers around the world, and its extensive customer base.

The global market for spice products is growing by 4–6% annually. Due to changes in lifestyle, purchasing power and consumer habits, this growth is even stronger in the emerging countries, where Gewürzmüller is also active. The changed habits are leading to an increased demand for industrially produced foods and convenience foods for consumption at home and outside the home. Frutarom sees spice products as an important strategic growth engine and invests heavily in innovative and unique products with high added value at its global locations. Yehudai said: “Following the acquisition of Nesse last year, the takeover of Gewürzmüller is another important milestone in the development and strengthening of Frutarom's activities in the field of spice products. We intend to continue investing in this important market segment. The activities of Blessing Biotech give Frutarom access to the innovative and fascinating area of ​​technologically advanced ingredients with the highest added value for food production. "

Yehudai adds, “With the experience Frutarom has demonstrated in acquiring businesses and generating synergies and cross-selling potential, we believe this acquisition will strengthen Frutarom's continued growth and profitability and add value to our customers , Employees and investors. "

The employees of Frutarom in the field of spice products and functional ingredients will also benefit from extensive access to experienced and qualified resources at all levels. The strong and experienced management of the Gewürzmüller Group, including the Rendlen family (the sellers), will be integrated into Frutarom and jointly manage the activities in Europe and Frutarom's worldwide activities in the spice business. The Gewürzmüller Group is very active in research and development, owns patented products and processes and works with leading universities in Europe. The research and development team at Frutarom is strengthened by qualified, experienced and high-quality resources.

As Yehudai explained, “In many other countries, especially in the Western and Eastern European markets, there is a synergy between the Gewürzmüller Group and the activities of Frutarom beyond the extensive synergies in the German market. We intend to leverage our global marketing and sales infrastructure to leverage and implement the multitude of cross-selling opportunities resulting from this acquisition by expanding both our customer base and product portfolio. "

Frutarom strives to derive the greatest possible benefit from the resulting operational synergies of its activities and the activities of the Gewürzmüller Group in Germany and elsewhere in order to achieve optimum operational efficiency and savings.

“Frutarom will continue its rapid growth strategy. The takeover of the Gewürzmüller Group is the sixth takeover of Frutarom since the beginning of the year. Frutarom is still looking for new strategic acquisition opportunities and corresponding business areas, ”said Yehudai.

Background information about the company

Frutarom is an international company with important production and development centers on three continents. The group markets its products on all five continents and sells them to more than 5 customers in over 000 different countries. Frutarom's products are primarily designed for the food, beverage, flavor, fragrance, pharmaceutical, nutraceutical, functional food, food additive and cosmetic industries.

Frutarom operates through two different divisions:

The "Flavors" division deals with the development, manufacture and marketing of flavor and seasoning preparations as well as mit Food Systems.

The "Fine Ingredients" division develops, produces and markets natural flavor extracts, natural functional ingredients, natural pharmaceutical / nutraceutical extracts, special ingredients such as essential oils and citrus flavors slike chemical flavorings.

Frutarom's products are manufactured in plants in the USA, Great Britain, Switzerland, Germany, Israel, Denmark, China and Turkey. The company's global marketing organization has offices in Israel, the USA, Great Britain, Switzerland, Germany, Belgium, the Netherlands, Denmark, France, Hungary, Romania, Russia, Ukraine, Kazakhstan, Belarus, Turkey, Brazil, Mexico, China, Japan, Hong Kong, India and Indonesia. Frutarom also works with local agents and distributors around the world and employs more than 1 people worldwide.

Please also visit our website: www.frutarom.com.

Source: Haifa [Frutarom]