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International Flavors & Fragrances Inc. announced it has completed its acquisition of Frutarom.

The new IFF is a global leader in taste, scent and nutrition:

  • Creates a differentiated portfolio with an increased focus on naturals and health and wellness as well as more comprehensive solutions.
  • Provides opportunities to expand into attractive and fast-growing categories, such as savory solutions, natural colors, natural food protection and health ingredients
  • Broadens complementary and growing customer base, including enhanced exposure to the fast-growing small- and mid-sized customers, such as private label
  • Establishes enhanced platform to deliver sustainable, profitable growth
  • Provides strong value creation opportunities to maximize shareholder value – including cross-selling benefits as well as cost synergies

“The coming together of IFF and Frutarom is a momentous achievement. We are excited to be moving forward as one company and pursuing new opportunities that benefit all our stakeholders around the globe,” said IFF Chairman and CEO, Andreas Fibig. “Over the past several months, our integration planning teams have been working to ensure that we capture the best of both companies and create a seamless and efficient transition to achieve both our operational and financial targets for this combination. Today, we are celebrating the creation of a new IFF with even greater aspirations as a leader in taste, scent and nutrition. On behalf of everyone at IFF, we welcome Frutarom and its talented team, and look forward to working closely with all employees to continue to deliver winning products to our customers and maximizing long-term value for our shareholders.”

IFF anticipates the combination with Frutarom will translate into accelerated financial performance, with robust top and bottom-line growth. The Company expects to generate an average sales growth of 5 – 7 %, and 10 % adjusted cash EPS growth, on a currency neutral and pro-forma basis, over the 2019 to 2021 period. IFF also believes it will realize $145 million in cost synergies by rationalizing procurement, optimizing global footprint and streamlining overhead expenses by the third full year after the completion of the merger. The Company will be prioritizing repayment of debt and anticipates to be less than 3X net debt to EBITDA in 18 – 24 months to retain its investment grade rating.

As previously announced, holders of Frutarom ordinary shares are entitled to receive $71.19 in cash and 0.249 of a share of IFF common stock for each Frutarom ordinary share they owned. Frutarom shareholders will also receive a special dividend, on a per share basis, equal to 0.249 of the per share value of IFF dividends with a record date between May 7 and October 4, 2018. The combined company will be headquartered in New York City and will maintain a presence in Israel.

International Flavors & Fragrances Inc. and Frutarom announced that they have entered into a definitive agreement under which IFF will acquire Frutarom in a cash and stock transaction valued at approximately $7.1 billion, including the assumption of Frutarom’s net debt. Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, Frutarom’s shareholders will receive for each Frutarom share $71.19 in cash and 0.249 of a share of IFF common stock, which, based on the 10-day volume weighted average price (VWAP) for IFF’s common stock for the period ending May 4, 2018, represents a total value of $106.25 per share.

By combining with Frutarom, IFF is accelerating its Vision 2020 strategy to create a global leader in taste, scent and nutrition. The combination unites two industry-leading, innovative companies with complementary customers, capabilities and geographic reach, resulting in more exposure to fast growing end markets and an enhanced platform to deliver sustainable, profitable growth. The combined company’s customers will have access to comprehensive and differentiated integrated solutions with increased focus on naturals and health and wellness.

Frutarom is a flavors, savory solutions and natural ingredients company, with production and development centers on six continents. It markets and sells over 70,000 products to more than 30,000 customers in over 150 countries. Frutarom is primarily focused on natural products, which drive more than 75 % of its sales. Frutarom’s product portfolio consists of innovative and integrated solutions combining taste and health, natural and clean label products. In addition, Frutarom mainly serves local and mid-size customers, and has a compelling presence in fast-growing adjacent and complementary categories such as natural colors, health and beauty ingredients, natural food protection and enzymes. Frutarom has a strong track record of growth, with expected sales of above $1.6 billion in 2018, and their previously announced target of $2.25 billion in sales by 2020.

Frutarom Industries Ltd. (“Frutarom”) announces the acquisition, via one of its subsidiaries, of the AB-Fortis® activities including a patent-protected micro-encapsulation technology that enables delivery of iron with increased biological absorption.

AB-Fortis is an advanced encapsulated iron system for delivering the recommended daily amount of iron in a single dose. It helps consumers avoid the common negative aspects and side effects of iron supplements, including metallic aftertaste, dental darkening, gastrointestinal upset, and nausea. AB-Fortis iron can be incorporated into fat-rich matrices, such as milk or yogurt, without causing oxidation. It is heat- and pH-stable. It will not accelerate oxidation of other components of a formulation, such as folate or omega-3 fatty acids. This makes it ideal for functional foods, infant nutrition and food supplements.

Iron deficiency constitutes a global health problem in developed and developing countries alike, and is particularly prevalent in children under the age of 6, for whom iron deficiency is associated with impaired psychomotor and cognitive development, as well as in pregnant women suffering from excess fatigue due to iron deficiency. Among these groups, the percentage of population suffering from iron deficiency reaches 20 % in developed countries and up to 60 % in some developing countries.

Frutarom acquired the technology and expanded its activity in the market after four years of experience developing applications in a wide range of food and beverage products.

Frutarom Industries Ltd., one of the world’s 10 largest companies in the field of flavors and natural specialty fine ingredients, continues its momentum of acquisitions and the implementation of its rapid and profitable growth strategy by announcing that it has signed an agreement for the purchase of 60 % of the shares of the Thai company The Mighty CO. LTD. (including the activity of Maharaj Food Co. Ltd. and Mighty International Co. Ltd., and hereinafter collectively: “Mighty”) for approximately THB 393 million (approx. US$ 12 million) (not including debt) and at a valuation of THB 655 million (approx. US$ 20 million) (not including debt).

In the framework of the transaction Frutarom will initially acquire 49 % of Mighty and, subject to a number of conditions precedent and regulatory approvals in Thailand, will raise its holdings to 60 %. The transaction includes a mechanism for future consideration subject to Mighty’s future performance and an option for the purchase of the balance of holdings in Mighty in two stages in periods beginning three years and five years from the date the transaction is completed. The first part of the transaction will be completed in the upcoming weeks and Frutarom estimates that raising its holdings to 60 % will be completed within several months. The acquisition will be financed by independent means and through bank debt.

Mighty’s sales turnover in the 12 months ended August 2017 totaled approx. THB 500 million (approx. US$ 15 million) after having registered average annual growth of 12 % over the past four years.

Mighty, which was founded in 1989, engages in the development, production and marketing of flavors, including savory taste solutions (the non-sweet spectrum of flavors). The company has a leading position in Thailand’s flavors market where there are very few producers of taste solutions, and is among the most innovative flavors companies in Southeast Asia based on independent R&D. In recent years Mighty has won a number of prizes as an innovative and leading flavors manufacturer in Southeast Asia. The company’s broad portfolio of solutions includes flavors, seasoning blends and marinades as well as specialty functional raw materials for the food and beverage industry with emphasis on the field of convenience foods, snacks, noodles, fish, meats, baked goods, beverages and dairy, and it has a portfolio of unique products and solutions adapted to Asian tastes based on the vast knowledge and experience of its managers. Mighty’s activity also includes unique solutions for producing raw materials for the fields of infant nutrition and elderly nutrition, and Frutarom intends to continue developing this activity in Thailand and in the countries of the region.

Approximately 60 % of Mighty’s activity consists of manufacturing taste solutions, with market leadership in the field of savory taste solutions, while 40 % is trade activity in specialty raw materials for the food, beverages and nutrition industries.

Exciting formulations to deliver nutraceuticals naturally

Frutarom BU Health is pleased to announce the launch of “Frutaceuticals”TM, a new fruit-based delivery system combining great flavor enhanced with the benefits of Frutarom’s-branded health ingredients. The fruit-based supplements had its premiere at SupplySide West, Las Vegas, on September 28-29.

The new nutrition delivery concept is based on URC® (Ultra Rapid Concentration) technology from Taura Natural Ingredients Ltd. (a Frutarom company) and Frutarom’s extensive expertise in bringing together taste and health to create a new form of supplement snack that will appeal to consumers suffering from “pill fatigue.”

According to New Hope Network, there is a growing trend in the US for new delivery systems for healthful ingredients. In the US, two-thirds of gummies (which began as a candy format) sold are as supplements taken by adults who do not want pills or capsules. Pill and capsule alternatives, such as chewables, gummies, liquids, or powders accounted for $13.3 billion (34 %) of the $38.8 billion supplement industry in 2015.

“While gummies are popular, they can be perceived as unhealthful sometimes because of added sugar and gelatin,” says Maider Gutierrez, Director of Marketing for Frutarom Health. “These real fruit pieces allow manufacturers to maintain cleaner labels by using simple ingredients that consumers trust. The new supplement snacks contain branded ingredients, including Neuravena®, AB-Fortis®, and Portusana®.

“Frutaceuticals” is made from real fruit and designed to deliver the taste, texture and goodness of true-fruit chews. “The fruit pieces, flakes, shapes, and pastes are produced using Taura’s URC process to quickly evaporate moisture from heat-sensitive fruits and maintain the raw material’s integrity,” says Peter Dehasque, CEO of Taura. “The fully automated system creates stable products that do not need added sugar, bulking materials, or preservatives.”

Frutarom Industries Ltd. (“Frutarom”), one of the world’s 10 largest companies in the field of flavours and natural specialty fine ingredients, continues its momentum of acquisitions and the implementation of its rapid and profitable growth strategy by announced that it has signed an agreement for the purchase of 100 % of the shares of the UK company Flavours and Essences (UK) Ltd. (“F&E”) for approximately US$ 19.5 million (£ 15 million) and a mechanism for future consideration 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 %.

F&E, which was founded in 1998, engages in the development, production and marketing of flavours and natural colours. 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. F&E’s activity is synergetic with Frutarom’s activity in the field of flavours, 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 colours.

F&E’s founding owners and managers will continue contributing from their rich experience towards continued rapid and profitable growth of the activity.