Glanbia Nutritionals acquires Foodarom to expand flavor capabilities
13 Aug 2020 --- Glanbia Nutritionals, a wholly-owned subsidiary of Glanbia plc, has agreed to acquire Foodarom. The latter is a Canadian-based custom flavor designer and manufacturer servicing the F&B industry with turnkey flavors and formulation support. Foodarom comprises a flavor library of more than 15,000 recipes and produces both liquid and powder products for various applications. The deal – pegged as a “strategic acquisition” – seriously scales the flavor arm of Glanbia’s business and is expected to be completed in the second half of this year.
The two companies note how Foodarom is highly complementary to Glanbia Nutritionals’ solutions-based customer approach and focus areas, strengthening Glanbia’s capability in the area of flavors and nutritional solutions.
The knowledge and experience of the combined R&D teams will further strengthen Glanbia’s growing position in flavors and further enhance Glanbia’s ability to provide optimized ingredient systems to its customers, according to Glanbia.
The Foodarom acquisition comes as Glanbia publishes its Half Year 2020 results for the six month period ended July 4, 2020.“We recently shared our ambition to scale the flavors area of our business,” says Brian Phelan, CEO of Glanbia Nutritionals. “We are excited to welcome their 130-strong team to Glanbia with their exceptional reputation and commitment to flavor excellence. I am delighted with the significant additional capabilities we will be able to offer the customers of both organizations by joining our great teams together.”
“Foodarom begins a new journey full of excitement and surrounded by its greatest asset, its employees!” says Pierre Miclette, CEO of Foodarom. “This new chapter in our story is an important step forward that will contribute to Foodarom’s development.”
Foodarom was founded in 2006 as a private company by Pierre Miclette (CEO) and John Murphy (COO) and two shareholder investors. It is headquartered in Montreal, Canada, with additional production facilities in Salt Lake City, US and Bremen, Germany. The company also has culinary laboratories in San Diego, US and Milan, Italy.
Protecting Glanbia’s strong financial position
The Foodarom acquisition comes as Glanbia publishes its Half Year (HY) 2020 results for the six month period ended July 4, 2020. The company reports a 25.4 percent drop in earnings to €85 million (US$100 million) for the first half of the year, before interest, taxes, and amortization. However, Glanbia says it is in a strong position with revenues up by 2.3 percent.
“In the first half of 2020, Glanbia Group delivered a resilient performance in the context of the priorities set in response to the (COVID-19) crisis. The Group’s financial priority from the onset of the pandemic was its financial strength. This focus led to a good operating cash flow performance in the first half of 2020,” says a company statement.
“Net debt at July 4, 2020 was €650.9 million, which is a decrease of €126.7 million versus the net debt position at the end of HY 2019. This represents a net debt to adjusted EBITDA ratio of 1.95 times. This financial strength positions Glanbia well to emerge strongly from the effects of the pandemic and provides the confidence to undertake strategic M&A such as the Foodarom acquisition which was agreed after the period ended,” it continues.
By Gaynor Selby
