Frutarom Acquires Slovenian Flavor Company ETOL

On 16.1.2012, Frutarom acquired 56% of the share capital of the Etol d.d., a Slovenian public company. The acquisition was performed outside the Slovenian stock market in return for the amount of approximately (€19.6 million) (US$ 24.9 million).

Jan 17 2012 --- Frutarom Industries Ltd., one of the ten largest flavor solutions and fine ingredients companies in the world, forges ahead with its successful rapid growth strategy and reports its second acquisition for 2012. On 16.1.2012, Frutarom acquired 56% of the share capital of the Etol d.d., a Slovenian public company. The acquisition was performed outside the Slovenian stock market in return for the amount of approximately (€19.6 million) (US$ 24.9 million). In the coming weeks, Frutarom intends to submit a takeover bid in the Slovenian stock market for the purchase of the remaining shares. If the bid is accepted in full, Frutarom will own all of Etol's share capital.

Speaking to FoodIngredientsFirst Frutarom CEO Ori Yehuda said "We have known ETOL for many years. We have a good relationship with the management and believe they do an excellent job. ETOL match Frutarom’s focus on natural products and fruit based products, they have very good people in sales and R&D, and there is great synergy between our companies.

"We believe merging the companies is an excellent step. We don’t know how much this takeover will cost once it’s finished. We plan to reflect the value of ETOL, and we will give very fair value for sellers and backers" Yehuda said.
 
Etol, founded in 1924, is a leading flavor company, with a long-standing reputation. Etol develops, manufactures, and markets flavors, focusing on natural flavor products for the food and beverage industry. Etol also has great experience in the development of fruit based flavors and products and Food Systems, specializing in local fruits of the region, as well as extensive activities in the growing area of bases for beverages that Frutarom has identified as a strategic area for the company, and in which it plans to further invest in order to substantially expand its activity.

Etol has exhibited impressive growth rates over the past few years, and its sales turnover has increased by 46%, from revenues of €31.5 million ($39.5 million)  in 2006 to revenues of €46 million (US$61 million) in 2010. Over the twelve months ending on September 30, 2011 Etol's sales turnover grew at a rate of 7.5% compared to the same period in 2010, reaching €48.5 million (US$68 million). The EBITDA in 2009 stood at approximately €8.2 million (US $11.4 million) and at €8.4 million (US $11.1 million) net of one-time expenses in 2010.

Equity as of September 30, 2011 stood at approximately €28.9 million (US$39.3 million).

Etol employs some 240 employees including a leading human capital in the areas of research and development and sales, and an experienced and successful management team. Etol has a manufacturing and marketing site in Sofia Vas, Slovenia, in which it has invested extensively over the past few years, and has incorporated innovative technologies. Etol also has additional real estate properties for future expansion. Etol's products are sold to over 46 countries outside of Slovenia, to a wide customer base in Central and Eastern Europe and in emerging markets, including Russia, Poland, the Ukraine, Turkey, Croatia, Serbia,  Belarus, Hungary, Slovakia, Macedonia, the Czech Republic, ,Kazakhstan and other emerging markets characterized by higher than average growth rates in comparison with the world average market growth. Leading food and beverage manufacturers in the countries it operates are among Etol's customers, including large multi-national food companies.

The acquisition is synergetic with Frutarom's activities, and is expected to significantly increase Frutarom's customer base and scope of sales in emerging markets, expand its product portfolio and deepen its operations and market share in these important markets. Frutarom intends to utilize Etol's research and development, sales, marketing and production capacities to develop its business in the region.

Yehudai believes there will be more acquisitions in the year ahead: "I believe there will be more acquisitions this year. We had 5 (acquisitions) last year; this put us in a good position for more acquisitions this year.

It is a challenging year due to global economic clouds. We are optimistic and looking at growth, we believe we will be successful. The acquisition of ETOL will contribute to our result in 2012. Together we believe that moving forward, Frutarom is in a good position in the flavor and food ingredient market."