Frutarom completes acquisition of majority stake in Bremil
31 May 2018 --- Frutarom is continuing its momentum of acquisitions this year, with the announcement that it has completed the transaction for the purchase of 51 percent of the shares of the Brazilian company Bremil Indústria Ltda. Bremil is a Brazilian producer of savory solutions and the deal is worth approximately US$30 million (BRL111 million) which includes estimated asset adjustments before the date of completion.
FoodIngredientsFirst reported on the purchase agreement, which was initially announced in December 2017, which includes an option for the purchase of the balance of Bremil's shares, to take effect starting five years from the date of the transaction’s completion. The transaction was financed through bank debt. Just yesterday, Frutarom released “record-breaking” Q1 2018 results, which come during the midst of their merger negotiations with International Flavors & Fragrance Inc (IFF) which recently agreed to acquire Frutarom in a cash and stock transaction valued at approximately US$7.1 billion.
According to Bremil’s managerial reports, its revenues over the 12 month period ending April 2018 totaled approximately US$38 million (approx. BRL140 million). The company was established in 1987 in the city of Passo Fundo in the Brazilian state of Rio Grande do Sul and holds a leading position in Brazil’s savory solutions market, with emphasis on convenience foods, prepared foods and processed meats.
Bremil, which employs about 250 workers, serves approximately 450 customers in Brazil and countries of the region, with a substantial presence among top meat producers. The company has two production sites, in southern and central Brazil, with a significant excess production capacity which Frutarom intends to utilize towards raising output and growth in Brazil and neighboring countries.
Bremil provides its customers with a complete portfolio of quality solutions based on natural ingredients and on a wide range of taste solutions and unique functional solutions which include seasoning blends, marinades, flavors, coatings, texture solutions and solutions for food protection. Bremil also engages in the field of taste and functional solutions for baked goods. The Bremil acquisition fits in well with Frutarom’s expanding global activity in savory solutions, strengthens its global leadership in this field and also provides Frutarom market leadership in Brazil and Latin America. By leveraging Bremil’s specialized know-how and technology along with Frutarom’s expansive sales and marketing platform in Brazil and Latin America, Frutarom will work on expanding Bremil’s activity into additional countries as well as capitalizing on the many cross-selling opportunities for Frutarom products among Bremil customers.
Bremil’s founders and managers will continue to manage the activity and they will also remain on as shareholders with 49 percent of Bremil’s capital equity.
Ori Yehudai, President and CEO of Frutarom Group, says: “The acquisition of Bremil is a continuation of the implementation of Frutarom Group's rapid, profitable growth strategy and the realization of its vision 'to be the preferred partner for tasty and healthy success.' This is an important strategic acquisition which enables Frutarom to make an additional major leap forward in strengthening its global leadership in savory solutions, as well as substantially reinforcing our position in the growing Brazilian market in particular and in Latin America in general.”
“I am convinced that this infrastructure will support the continued rapid growth of our activity in Latin America. In recent years Frutarom has been successfully implementing a strategy of rapid geographic expansion in North America and in emerging markets, which have higher rates of growth. This strategy has resulted in Frutarom sales in Latin America over the past seven years has grown by a factor of 16, and sales in emerging markets have grown fivefold, while Frutarom’s total sales grew by a factor of 3.3. Frutarom’s percentage of sales in Latin American reaches nearly 15 percent compared to approximately 3 percent in 2010 and the percentage of sales in emerging markets will be close to 45 percent of total Frutarom sales compared with 27 percent in 2010,” he concludes.
