Naturex and Natraceutical Group Sign their Merger in Ingredients

This merger, triggered by two of the leading publicly traded companies in the ingredients industry, will create the number one independent company of natural specialty ingredients in the world.

1 Oct 2009 --- Spanish multinational Natraceutical Group, a leading biotechnology corporation in the field of research and development on functional ingredients, active principles and nutritional supplements, and French multinational Naturex, a leading supplier of natural speciality ingredients to food, flavour, food supplements, pharmaceutical and cosmetic industries, formalized yesterday the binding contracts for the merger of their ingredient activities.

The transaction will be structured by means of the integration of Natraceutical’s Ingredients Division into Naturex. This merger, triggered by two of the leading publicly traded companies in the ingredients industry, will create the number one independent company of natural specialty ingredients in the world.

With a fully complementary product portfolio that includes nutraceutical ingredients, flavouring, preservative and innovative extracts on Naturex’s side, and natural colours, fruit and vegetable powders, pectins, functional ingredients, yeasts and caffeine by Natraceutical’s ingredients division, the new company will have a balanced geographical presence between Europe (50% of the combined proforma turnover) and the USA (34%).

Once the merge will be completed, Naturex will have production sites in Europe (France, Italy, Spain, Switzerland and the United Kingdom), the USA, Morocco, Australia and Brazil and own sales offices in the USA, Europe and Asia, thus being ideally placed to take advantage of the ongoing growth and consolidation of this sector.

Naturex proforma sales after the merge are expected to reach in 2009 around € 185 million and proforma EBITDA will represent around € 28 million, with a debt ratio not higher than 3.5 times EBITDA.

Natraceutical is to hold a stake of 39% in Naturex, by means of a capital increase in kind, and become board member, alongside SGD, the family-controlled holding company of Jacques Dikansky, Naturex’s chairman and CEO, who will remain the reference shareholder in terms of voting rights. The transaction also comprises € 38 million for Natraceutical, debt or cash, € 10 million of which will not be made effective until the confirmation of both companies’ year-end results.

The company will operate under Naturex management, headed by Jacques Dikansky, chairman and CEO of the company. 

After the completion of the transaction, and from an operational point of view, Natraceutical Group will focus their efforts in the full development of their nutritional supplements division in Europe, which the company markets exclusively in pharmacies under the brand name Forté Pharma.