Glanbia plc, the Better Nutrition company, announced that it has entered into an agreement with the shareholders of Aroma Holding Company, LLC and related entities, the owners of Flavor Producers LLC to acquire the business for an initial consideration of USD 300 million plus deferred consideration (the “Transaction”).
Transaction overview and rationale
Flavor Producers is a leading flavour platform in the US, providing flavours and extracts to the food and beverage industries, with a focus on organic and natural ingredients. Glanbia will operate Flavor Producers within its Glanbia Nutritionals (“GN”), Nutritional Solutions business (“NS” or “Nutritional Solutions”).
The Transaction is consistent with Glanbia’s strategy of acquiring complementary businesses to grow its Better Nutrition platforms. Flavor Producers significantly expands NS’s flavours offering, bringing new capabilities in the attractive and growing natural and organic flavours market which are aligned with long term consumer trends.
Transaction highlights include:
- Flavor Producers is a leading independent flavours business in the US which represents a synergistic fit with the existing flavours capability of NS;
- Acquiring an established platform with a 40 year plus history, a strong team and a track record of innovation;
- Excellence in R&D and proprietary ingredients with best-in-class formulation capabilities. Extensive flavour library and vertical integration into flavour extracts, facilitating clean label solutions;
- Financially attractive margin and growth profile which will improve business mix within NS; and
- Consistent with Glanbia’s balanced capital allocation framework and retaining a strong financial position post Transaction.
- Transaction consideration, financing and closing
The initial consideration is USD 300 million with an additional deferred payment of up to USD 55 million, conditional on performance in 2024. Final consideration will also be impacted by the value of actual working capital and customary completion accounts at closing. The Transaction will be financed by Glanbia’s existing banking facilities and cash. Glanbia has a strong balance sheet with net debt of USD 248.7million at the end of FY 2023, a net debt to adjusted EBITDA ratio of 0.5 times and USD 1.3 billion of committed debt facilities.
It is anticipated that the Transaction will close in the first half of FY 2024 subject to customary closing conditions and agreed completion accounts.
The Transaction is expected to be marginally accretive to Glanbia’s adjusted earnings per share in its first full year of ownership.
The Company’s current EUR 100 million buyback programme announced on 28 February 2024 is ongoing and is unaffected by this Transaction.
About Flavor Producers
Flavor Producers was founded in 1981 as a family business in Valencia, California. They pioneered the development of natural and organic flavours by sourcing raw materials from nature. Plant-based flavour and extract creation is the Company’s specialty, with unique technologies that deliver transparently delicious taste to food and beverages. Today, Flavor Producers is a leading developer and manufacturer of natural and organic flavours in North America. Flavor Producers serves leading FMCG companies as well as high growth and emerging consumer brands.
In the 12 months to February 2024, Flavor Producers delivered USD 86.1 million net sales and adjusted EBITDA (before non-recurring costs) of USD 19.7 million. The gross assets of Flavor Producers as at February 2024 were USD 321 million.
Glanbia plc, the Better Nutrition company, announced that it has entered into an agreement with the shareholders of Aroma Holding Company, LLC and related entities, the owners of Flavor Producers LLC to acquire the business for an initial consideration of USD 300 million plus deferred consideration (the “Transaction”).
Transaction overview and rationale
Flavor Producers is a leading flavour platform in the US, providing flavours and extracts to the food and beverage industries, with a focus on organic and natural ingredients. Glanbia will operate Flavor Producers within its Glanbia Nutritionals (“GN”), Nutritional Solutions business (“NS” or “Nutritional Solutions”).
The Transaction is consistent with Glanbia’s strategy of acquiring complementary businesses to grow its Better Nutrition platforms. Flavor Producers significantly expands NS’s flavours offering, bringing new capabilities in the attractive and growing natural and organic flavours market which are aligned with long term consumer trends.
Transaction highlights include:
- Flavor Producers is a leading independent flavours business in the US which represents a synergistic fit with the existing flavours capability of NS;
- Acquiring an established platform with a 40 year plus history, a strong team and a track record of innovation;
- Excellence in R&D and proprietary ingredients with best-in-class formulation capabilities. Extensive flavour library and vertical integration into flavour extracts, facilitating clean label solutions;
- Financially attractive margin and growth profile which will improve business mix within NS; and
- Consistent with Glanbia’s balanced capital allocation framework and retaining a strong financial position post Transaction.
Transaction consideration, financing and closing
The initial consideration is USD 300 million with an additional deferred payment of up to USD 55 million, conditional on performance in 2024. Final consideration will also be impacted by the value of actual working capital and customary completion accounts at closing. The Transaction will be financed by Glanbia’s existing banking facilities and cash. Glanbia has a strong balance sheet with net debt of USD 248.7million at the end of FY 2023, a net debt to adjusted EBITDA ratio of 0.5 times and USD 1.3 billion of committed debt facilities.
It is anticipated that the Transaction will close in the first half of FY 2024 subject to customary closing conditions and agreed completion accounts.
The Transaction is expected to be marginally accretive to Glanbia’s adjusted earnings per share in its first full year of ownership.
The Company’s current EUR 100 million buyback programme announced on 28 February 2024 is ongoing and is unaffected by this Transaction.
About Flavor Producers
Flavor Producers was founded in 1981 as a family business in Valencia, California. They pioneered the development of natural and organic flavours by sourcing raw materials from nature. Plant-based flavour and extract creation is the Company’s specialty, with unique technologies that deliver transparently delicious taste to food and beverages. Today, Flavor Producers is a leading developer and manufacturer of natural and organic flavours in North America. Flavor Producers serves leading FMCG companies as well as high growth and emerging consumer brands.
In the 12 months to February 2024, Flavor Producers delivered USD 86.1 million net sales and adjusted EBITDA (before non-recurring costs) of USD 19.7 million. The gross assets of Flavor Producers as at February 2024 were USD 321 million.
Symrise AG makes changes to its Executive Board effective 1 April 2021. Heinrich Schaper, Executive Board member and responsible for the Flavor segment, will be retiring and leaving the Company on 31 March 2021. In the course of succession planning, the Supervisory Board has decided that Dr Jean-Yves Parisot is to take over the global leadership of the Flavor segment in addition to his responsibility for the Nutrition segment. This will involve combining the Flavor & Nutrition activities in one segment. Achim Daub, who has been Board member since 2006 and responsible for the Scent & Care segment, has decided to pursue new professional opportunities. He will therefore also leave the Company on 31 March 2021 by mutual agreement and on best terms. Succession planning for the leadership of the Scent & Care segment has already been initiated. On an interim basis, the CEO of Symrise AG, Dr Heinz-Jürgen Bertram, will lead the segment. Executive Board member Olaf Klinger will continue to head the finance, legal and IT department.
Jean-Yves Parisot (56) has been Head of the Nutrition/Diana business unit since 2014 and a member of the Executive Board of Symrise AG since October 2016. In his role, he was most recently responsible for the successful acquisition of ADF/IDF in the U.S. Prior to the acquisition and integration of Diana Group, he headed the Food Division within the Diana Group for five years. Before joining Diana, he held senior positions in several global pharmaceutical, chemical and biotech companies, including Air Liquide, Danisco and Rhodia. He started his career in Sales & Marketing at Pfizer. Jean-Yves Parisot holds a Doctor degree in Veterinary Medicine, and an MBA from HEC Paris.
Heinrich Schaper (64) has held various management positions at Symrise AG and its predecessor companies for more than four decades. In October 2016, he was appointed President of the Flavor segment. Among other positions during his career at Symrise, he was Vice President Flavor in the U.S., where he was responsible for expanding the business, and was previously responsible for developing the U.K. market as Divisional Manager. Heinrich Schaper began his professional career in 1975 after obtaining a degree in Industrial Management.
Achim Daub (58) joined Symrise AG in 2004, assuming global leadership of the Fragrance division in 2005 and was appointed to the Executive Board in 2006. He has consistently driven the expansion of the Scent & Care segment, particularly in France and in the U.S. Under his leadership, the Scent & Care segment also very successfully developed the world’s first and only fully functional artificial intelligence system in perfumery. Before joining Symrise, Achim Daub had worked for Procter & Gamble for many years.
State-of-the-art facility to support development of innovative, on-trend, nutritious products to meet growing food and beverage demand in Asia-Pacific
Archer Daniels Midland Company celebrated the opening of its new regional office and state-of-the-art flavor and ingredient creation, application, development and customer innovation center in Shanghai, China. The opening of the space was announced at a dedication and ribbon-cutting ceremony.
“With today’s busy lifestyles, people are turning to healthier eating habits, accelerating changes in consumer tastes and preferences at an unprecedented rate. For ADM, Shanghai has played a critical role in our continued growth and innovation. To help Asia-Pacific food and beverage customers remain a step ahead, we’re excited to leverage our technology, expertise and global scale,” said Donald Chen, ADM’s president, Asia.
Shanghai’s technical innovation center will enable ADM to work closely with customers to create complete flavor and specialty ingredient solutions. It will be staffed by a team of food scientists, flavorists and applications experts, along with sales, marketing and regulatory personnel. The new Shanghai facility joins our recently opened Singapore Innovation Center in helping ADM meet growing demand in the region.
“Around the world, ADM continues to invest to ensure that we are the go-to solution providers for clean label, sustainable ingredients and great taste,” said Vince Macciocchi, president of ADM’s Nutrition business. “This new facility enhances our portfolio and capabilities ensuring our customers meet consumer demands for new, innovative food and beverages.”
The new innovation center features a wide range of capabilities, including a food and flavor analytic lab; beverage and dairy applications labs and pilot plants; a bakery lab; a confectionery and personal care lab; a culinary kitchen; flavor creation labs; sensory evaluation facilities; and a customer innovation center.
China is home to approximately 675 ADM employees, with application labs in Beijing, Shanghai and Guangzhou; a flavor production facility in Beijing; sweeteners and soluble fiber complex in Tianjin; animal nutrition facilities in Dalian, Tianjin, Nanjing, Zhangzhou and Xiangtan. ADM has more than 1,000 employees throughout the wider Asia-Pacific region, where the company operates a wide range of processing facilities, including several animal feed facilities; a flavor and ingredient facility; food and flavor labs in Japan, Singapore and Australia; and sales offices in every major market in the region.
