Frutarom Acquires Acatris for 10.5 Million Euro

04/10/06 Frutarom Industries Ltd. has signed an agreement for the acquisition of 100% of the share capital of multinational Acatris Health in consideration for a cash payment of Euro 10.5 million.

Acatris Health, a global health ingredients company in Belgium and the Netherlands, is a member of the Dutch Royal Schouten Group N.V. Acatris Health is engaged in the development, production, sale and marketing of unique and innovative botanical ingredients for the dietary supplement and functional food markets. Acatris Health's LifeLine product range includes Linumlife, Fenulife, and Soylife, which are strong reputable product brands and enjoy both licenses and patents that effectively promote and protect the sales of these clinically-proven natural health ingredients. Acatris Health sells its products to over 450 leading companies in the food supplement, functional food and cosmetic markets, largely in Western Europe and the United States.

With its staff of 38, Acatris Health has achieved sales of US$14.7 million (Euro 11.6 million) in 2005 with margins similar to that of Frutarom's Fine Ingredients Division. Frutarom expects that Acatris Health's activities will grow in the coming years at an above-industry rate largely due to increased sales of its unique, branded proprietary patented products that enjoy above average profitability.

According to Frutarom's President and CEO, Ori Yehudai, "Acquiring Acatris Health is an important strategic acquisition that represents another step in the implementation of Frutarom's rapid growth strategy and the fulfillment of its vision "To be the Preferred Partner for Tasty and Healthy Success." The acquisition of Acatris Health will significantly strengthen our unique, natural product portfolio that we offer our customers, particularly in the dietary supplement and functional food markets that are enjoying rapid growth, and strengthen Frutarom's leadership position in these markets." Yehudai added that "thanks to Frutarom's proven experience in implementing effectively mergers and acquisitions, and leverage of all possible cross-selling synergies, we are convinced that this acquisition will also contribute to Frutarom's continuing rapid growth and profitability, and will create high value for our customers, our employees, and our shareholders"

Mr. Piest, CEO of Royal Schouten Group ("RSG"), which was represented by JBR Corporate Finance in the sale process of Acatris Health, commented that RSG and Acatris Health's management are pleased with the sale of Acatris Health to Frutarom, which RSG sees as a leading global player in the industry. "Our longstanding and special relationship with the Frutarom Group, with whom we have cooperated for years with great success, together with Frutarom's advantageous global position, assures that the integration of the two companies' activities will contribute both to Acatris Health's devoted and superb staff and customers, as well as those of Frutarom."

Frutarom said that a high degree of synergy exists between the current activities of Acatris Health and Frutarom, which Frutarom will work diligently to realize. Acatris Health's activity will be merged within the global structure of Frutarom's Fine Ingredients Division, and also be combined with the successful activity of Flachsmann Switzerland, acquired by Frutarom in 2003. Acatris Health's experienced and effective management, R&D, marketing and sales teams will contribute significantly to the Frutarom Group's existing human resources, and Frutarom's R&D community will benefit from significant new expertise in the arena of natural products with the addition of Acatris Health's R&D capabilities and its pipeline of future products and applications.