04 May 2016 --- Frutarom Industries Ltd. continues its momentum of acquisitions with the announcement that it has acquired 100% of the German partnership Extrakt Chemie Dr. Bruno Stellmach GmbH &Co. KG as well as the property on which Extrakt Chemie’s plant is situated in exchange for approximately USD 6 million in cash plus the assumption of debt (net) amounting to approximately USD 2.2 million.
Revenues of Extrakt Chemie for the fiscal year ended February 2016 amounted to approximately USD 10 million.
The purchase agreement includes a mechanism for future consideration conditional on the business performance of Extrakt Chemie during 2016 and 2017. The transaction was independently financed.
Extrakt Chemie has a leading position in the German market. Its 150 customers include top global pharma companies with whom the company has long-lasting relationships. The company is also active in other Western European countries such as Denmark, Switzerland, France and Austria as well as in the Australian market, and maintains an efficient production site with GMP certification for pharmaceutical products in Stadthagen, close to Hannover in northwest Germany, which also includes a research and development laboratory. Extrakt Chemie has a staff of about 35 employees.
Extrakt Chemie’s production capabilities and products reinforce Frutarom’s production and technological infrastructure and its portfolio of natural solutions in the pharma field. Frutarom will work towards capitalizing on opportunities for optimizing its global resources in the field of natural extracts along with the cross-selling opportunities arising from this acquisition in expanding its R&D and production of natural specialty solutions combining taste and health in response to consumer
demand and major trends towards healthier and more natural products in the global medications, nutritional supplements, foods and cosmetics markets. This field has been growing at a rapid pace and Frutarom’s unique capabilities give it a solid competitive edge.
Extrakt Chemie’s owners, and foremost among them its chief technologist and commercial manager with their decades of experience in the market for natural plant based extracts, will join Frutarom's managerial ranks in its Specialty Fine Ingredients Division.
Ori Yehudai, President and CEO of Frutarom Group, said: "Over the past two years Frutarom has taken a major strategic step in strengthening its position as a leading global manufacturer of specialty fine ingredients. We acquired Montana Food in Peru and Vitiva in Slovenia along with Nutrafur and Ingrenat in Spain, companies engaged among other things in natural plant extracts and natural colors, as well as Florida-based CitraSource and Scandia specializing in natural citrus based specialty ingredients, and also Algalo and Grow with their unique technologies for natural raw material extracts.
"The acquisition of Extrakt Chemie is a natural continuation in the strengthening of our global infrastructure for natural ingredient extracts while diversifying and broadening our production capacity and capabilities in the field of pharma and natural medications and adding an efficient, high quality and reputable production base to Frutarom’s global production network," continued Yehudai.
“We will continue investing in significantly expanding our global activity in this important and growing field, both through strategic acquisitions and research and development, and by creating partnerships with knowledge centers specializing in innovative natural ingredients,” he said.
"The acquisition of Extrakt Chemie is the 30th acquisition we have made in the past five years and the fifth we have completed since the beginning of 2016 in continuing the implementation of our rapid and profitable growth strategy combining strategic acquisitions with internal growth surpassing the rates of growth in markets in which we operate," Yehudai said in conclusion.
"We have an excellent pipeline of future acquisitions which will contribute, along with continued reinforcement of our market leadership in joining together the worlds of natural flavors and health, towards achieving the goals we recently set out: USD 2 billion in sales by 2020 along with an EBITDA margin of over 22% in our core activities," Yehudai claims.
