Frutarom’s 5th acquisition in 2017: Acquires UK-based F&E for US$19.5m
16 Aug 2017 --- Frutarom Industries Ltd. are continuing its momentum of acquisitions by signing an agreement for the purchase of 100 percent of the shares of the UK company Flavours and Essences (UK) Ltd. (F&E). The deal was completed for approximately US$19.5 million (£15 million) and based on F&E’s future business performance over the period of three years from the purchase date. The transaction was completed upon signing and financed through bank debt.
According to F&E management reports, its sales turnover for the 12 months ending in July 2017 totaled approx. US$17.4 million (approx. £13.7 million) and it registered an average annual rate of growth for the past five years of over 20 percent.
F&E engages in the development, production and marketing of flavors and natural colors. F&E operates a production site and R&D center in Blackburn, England, employs 41 people, and has a broad customer base in Europe, particularly in the UK and Ireland. Frutarom notes that F&E’s activity is synergetic with Frutarom’s activity in the field of flavors, activity which has grown in recent years by rates considerably higher than the market rate of growth, as well as with Frutarom’s developing activity in the field of natural food colors.
Ori Yehudai, President and CEO of Frutarom Group, says: “This is another acquisition of activity in Frutarom’s core field which will enable us to offer our customers a wider portfolio of solutions. This acquisition is further reinforcement for our growing activity in the UK where Frutarom holds a leading position in flavors. Frutarom will drive at exploiting to the utmost the cross selling opportunities inherent in this acquisition and will work towards expanding the product portfolio to F&E’s existing customer base. In addition, Frutarom will take measures to achieve maximum commercial and operational efficiency from merging F&E’s activity with its own activity in the UK.”
“The F&E acquisition is a continuation of the implementation of Frutarom’s rapid and profitable growth strategy and the realization of its vision 'to be the preferred partner for tasty and healthy success.' This is the fifth acquisition we have made this year after having acquired Unique Flavors in South Africa, the French flavors company René Laurent, the Vietnamese flavors company WFF, and acquiring SDFLC of Brazil with its flavor solutions for ice creams and desserts.”
In conclusion, Yehudai added: “Since 2015 we have already acquired 24 companies which have been integrated into our global activity and have been and will continue contributing to further growth in sales and improved profits and margins through maximal capitalization on the synergies they bring. We are working on identifying and executing further strategic acquisitions of companies and activities within the range of our operations. We will continue carrying out our rapid profitable growth strategy, which is based on combining profitable internal growth and strategic acquisitions, in order to achieve the targets we recently set: sales of at least US$2 billion with an EBITDA margin of over 22 percent in our core activities by the year 2020.”
