IFF transfers Savory Solutions Group to PAI Partners
03 Jan 2023 --- IFF has agreed to sell its Savory Solutions Group to PAI Partners, a global private equity firm with a strong focus on the food and consumer industry.
The transaction, detailed at the end of last year, values the business at approximately US$900 million, and cash proceeds net of taxes and expenses will be primarily used to reduce outstanding debt.
IFF and PAI Partners expect to close the transaction in the second quarter of 2023, subject to customary closing conditions, including satisfaction of applicable consultation requirements and regulatory clearances.
J.P. Morgan Securities and Lazard acted as financial advisors to IFF, and Cleary Gottlieb Steen & Hamilton provided legal support.
Elevating its portfolio
A vital aspect of the company strategy is to “continuously evaluate our portfolio to identify opportunities to maximize shareholder value,” according to company CEO Frank Clyburn.
“The sale of IFF’s Savory Solutions Group is an important milestone as it allows us to focus on our highest-return businesses, improve our capital structure and enhance our go-forward growth and return profile,” he continues.
IFF and PAI Partners expect to close the transaction in the second quarter of 2023.“We appreciate the contributions of our Savory Solutions colleagues who have, for years, demonstrated their commitment to innovation, service and quality. We will work closely with PAI Partners to have a successful transition and look forward to Savory Solutions’ future under its ownership.”
Prepared food and foodservice gains
IFF’s Savory Solutions Group focuses primarily on ingredients for prepared foods and foodservice, including products for butchers and plant-based solutions for the vegan and vegetarian markets.
It includes several business units operating from Austria, Germany, Italy, Ireland, Poland, Canada, Mexico and Thailand.
The company reveals that with approximately 1,800 employees, IFF’s Savory Solutions served more than 11,000 customers and generated around US$475 million in revenue over the last 12 months.
This latest transaction values the business at approximately 14 times the last 12-month EBITDA.
In November, IFF’s latest ingredient, a plant-based protein based on soy called SUPRO TEX, was launched to accelerate growth in the alternative meat category.
The company recently detailed its plans to extend citrus innovation capacity, highlighting ingredient resurgence.
Edited by Elizabeth Green
