Frutarom Acquires Nutrafur of Spain
07 Sep 2015 --- Israeli fruit ingredients and flavors company Frutarom Industries Ltd has announced the purchase of 79% of shares of Spanish company Nutrafur S.A. based on a company value of US$14.5 million (€13.1 million).
The purchase is the 10th deal for Frutarom this year, in line with its strategy to become a leading global player in the fruit ingredients and flavors industry, with a turnover of $1.5bn by 2020.
Nutrafur specializes in the research and development, manufacture, and sales and marketing of specialty natural plant extracts bearing antioxidant properties or scientifically proven healthy qualities and supported by clinical studies for the food, pharma, nutraceutical and cosmetics markets. Nutrafur sales for the 12-month period ending June 2015 amounted to approx. US$ 13 million.
Nutrafur has extensive experience in the extraction of active components from vegetation, particularly rosemary, olive and citrus. Nutrafur products blend in well with Frutarom's portfolio of natural ingredient solutions and will help expand Frutarom's line-up of natural products for both food and health products. Nutrafur's activity in the field of antioxidants, particularly in the area of food preservation and protection and extending of shelf life based on natural components, establishes even further Frutarom's portfolio of solutions in this field which has been significantly strengthened following its acquisitions earlier this year of Vitiva and Ingrenat which are also active in this growing field. Active antioxidant ingredients constitute an important supporting product for food manufacturers, and Frutarom will integrate these specialty ingredients into the comprehensive portfolio of products and solutions offered to its many customers in the savory field as well. Frutarom will work towards capitalizing on the many cross-selling opportunities arising from the acquisition and supporting the continued rapid development and production of natural functional solutions that combine taste and health in response to consumer demand and the major trends in the global food market towards more natural and healthier foods. This field is growing by leaps and bounds, and Frutarom's unique capabilities give it a competitive edge.
Nutrafur has an R&D and sales center and an efficient manufacturing site in Murcia, Spain with large production capacity and the possibility for considerable expansion. The company has 67 employees, of which about 10 are engaged in R&D and have advanced academic degrees and expertise in various fields.
Nutrafur's production site is in close proximity to that of Ingrenat which was acquired during the first quarter this year, and this geographic proximity between the sites will provide maximum operational flexibility in terms of the use of various extraction technologies as well as use of the various manufacturing systems within the framework of optimizing Frutarom's global supply chain. The acquisition will allow for significant operational savings in Frutarom's global manufacturing structure in the area of natural extracts and in the fields of purchasing, production, logistics, and marketing of the Company's solutions in these fields.
Ori Yehudai, President and CEO of Frutarom Group, said: "Over the last few months Frutarom has made a major leap forward in strengthening its position as a leading global producer of natural specialty ingredients and the acquisition of Nutrafur fits in well with our rapid and profitable growth strategy while deepening and expanding Frutarom's activity in the growing field of natural plant extracts and antioxidants for food products. We will continue investing in considerably expanding our global activity in this important and growing field both by means of strategic acquisitions and through collaboration with universities, research institutes and innovative product development startup companies.
"The Nutrafur acquisition affords Frutarom advanced R&D capabilities along with a top-level and experienced managerial team, as well as substantial customers. The acquisition provides an opportunity for improving the Group's operational flexibility and efficiency. Thanks to Frutarom's proven experience in the successful execution of acquisitions and realization of the many synergetic and cross-selling opportunities inherent in combining acquired activities with those of Frutarom, we are convinced that this acquisition too will contribute towards the continuation of Frutarom's rapid and profitable growth and will generate top value for our customers, our employees, and our investors."
Mr. Yehudai concluded by saying: "The acquisition of Nutrafur is our tenth acquisition since the beginning of the year and we are working on identifying and executing further strategic acquisitions. We will continue implementing our rapid growth strategy which is based on combining profitable internal growth with strategic acquisitions in order to achieve the goals we recently set for ourselves: sales reaching at least US$ 1.5 billion with an EBITDA margin of over 22% for our core activities by the year 2020."
