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.
Paul Graham, GB Managing Director at Britvic, has been appointed as the new President of the British Soft Drinks Association (BSDA) trade body following election at its AGM.
Paul takes over from Nichols CEO Dr Marnie Millard OBE, who led a number of initiatives during her time as President, including the BSDA’s role as a founder-member of Circularity Scotland Ltd, a scheme administrator for Scotland’s deposit return scheme (DRS).
Paul joined Britvic in September 2012 having worked in a range of commercial roles across all trade channels for United Biscuits and Mars Confectionery. He was promoted to his current position in July 2013 and was appointed Vice President of the BSDA in 2020.
He said: “I am delighted to be elected as the new BSDA President. I aim to continue the outstanding work of Marnie and past presidents on making further significant progress on a wide range of soft drinks-related issues, not least helping our partners in the hospitality sector get back on their feet after an extremely challenging year.
“As a founder-member of Circularity Scotland, the BSDA continues to work closely with the Scottish Government to develop its DRS, which is currently due to be introduced in 2022, although we are eager to see the Scottish Government review this date to help ensure delivery of a well-designed DRS system in Scotland that works for consumers and businesses.”
William Watkins, Founder and Owner at Radnor Hills, has been elected to replace Paul as Vice President of the BSDA. William founded Radnor Hills in 1991 on his family farm based on the Welsh borders. The business now produces more than 350 million products per year.
The BSDA represents UK producers of soft drinks, including carbonated drinks, still and dilutable drinks, fruit juices and bottled waters. Membership includes the majority of Britain’s soft drinks manufacturers as well as franchisors, importers and suppliers to the UK soft drinks industry.
In general, citrus prices were high in São Paulo State in 2020. With the lower orange production in the Brazilian citrus belt (São Paulo and the Triângulo Mineiro) in the 2020/21 season due to bad weather conditions, the demand from processors for fruits continued high along the year, which underpinned prices.
According to a report released by Fundecitrus on December 10, crop failure in the citrus belt (SP and the Triângulo Mineiro) should be the worst since 1988/1989, when the series began. In total, orange production should be 30 % lower in the 2020/21 season, totaling 269.36 million boxes of 40.8 kilos each.
INDUSTRIAL PRICES – Although processors began the 2020/21 season with high volumes of juice stocked – 471 thousand tons of Frozen Concentrate Orange Juice (FCOJ) Equivalent, according to CitrusBR –, low orange supply kept the demand for fruits high, which reflects on bidding prices.
On the average of the 2020/21 season, prices in the spot market between July and November closed at 23.51 BRL/box, 17.8 % up from that in the same period of 2019 and 7 % above that in the same period of 2018, in nominal terms.
IN NATURA MARKET – Higher demand from the industry lowered the availability of fruits in the in natura market, since some farmers who usually sell to the in natura market preferred to allocate their fruits to processors, due to the uncertainties caused by the covid-19 pandemic and the attractive prices bid by processors. This scenario added to the weather issues and high demand pushed up orange prices (in natura) all the year. For the variety pera rio, prices hit the highest level of the year in November, when the average was 43.35 BRL/box, on tree, 54.6 % up from that in Nov/19, in nominal terms.
The combined trade fair of BIOFACH, the World’s Leading Trade Fair for Organic Food, and VIVANESS, the International Trade Fair for Natural and Organic Personal Care, will be more international and diverse than ever before when it opens its doors at Exhibition Centre Nuremberg from 12 – 15 February. Both shows are setting new records for exhibitor numbers, display area and international focus. A total of 3,792 exhibitors – 292 of them at VIVANESS – from 110 countries will showcase their products to the trade public on a display area measuring 57,609 m2. BIOFACH and VIVANESS 2020 are offering their roughly expected 50,000 visitors even more diversity than ever, in two additional halls. The approaches that the organic system already offers for resolving urgent issues affecting the future will be discussed by the organic sector as part of the congress theme “Organic delivers!”, while water will be the focus of the special show “All about water – is the basis of life endangered?”. The key trends at BIOFACH this year are “Packaging”, “Vegan 2.0”, “Open Pollinated Varieties” and “Region 2.0”.
All facets of organic: the thematic focus areas at BIOFACH
BIOFACH offers three major thematic focus areas to explore: Know-how & Learning, New Products & Trends, and Experience & Discover. Besides the BIOFACH Congress, the Know-how & Learning area includes the German-language “Fachhandelstreff” for specialist retailers, the network hubs “Generation Future” and “Initiatives & NGOs” as well as the new special show “All about water – is the basis of life endangered?”. The focus of “New Products & Trends” is on new products, newcomers and start-ups. This also includes the Novelty Stand (www.biofach.de/noveltystand) with 629 registered new products and the Best New Product Award, which is decided by trade visitors based on the products showcased at the Novelty Stand. The “New Products & Trends” area also includes the Pavilion that the Federal Ministry for Economic Affairs and Energy sponsors for innovative new companies, the “German Newcomers”. Twenty-five newcomers and start-ups will be presenting to the trade public there under the heading of “Innovation made in Germany”. (www.biofach.de/en/newcomer).
The Experience the World of OLIVE OIL, WINE and VEGAN are part of the thematic focus area “Experience & Discover”. Product presentations, tastings and accompanying events for trade visitors are a long-standing part of the program there. There is also a standing tradition of coveted awards: the international organic wine prize known as MUNDUS VINI BIOFACH, and the Olive Oil Award.
BIOFACH World
NürnbergMesse has proven expertise in the field of organic foodstuffs.In February every year, the international organic sector gathers in Nuremberg at BIOFACH, the World’s Leading Trade Fair for Organic Food. The comprehensive range of certified organic products on display shows their diversity – from fresh products like dairy and cheese, fruit, vegetables, dry products like grains and pulses, nuts and confectionery to beverages. The international patron of BIOFACH is IFOAM – Organics International, while the national supporting organization is the German Federation of Organic Food Producers (BÖLW). An integral part of this world-leading fair is the BIOFACH Congress, a knowledge-sharing platform that is unique worldwide. With another six BIOFACH events in China, India, Japan, South America, Thailand and the USA, BIOFACH World has a global presence and year for year brings together more than 4,500 exhibitors and
150,000 trade visitors.
In marketing year 2018/19 FAS Warsaw expects that Polish apple producers will see a record-level harvest. Post forecasts Poland’s apple production to reach 4.0 million metric tons, a 43-percent increase from marketing year 2017/18. Post also expects marketing year 2018/19 fresh-apple exports to increase significantly over the previous year, due to record production and good dessert-fruit quality. …
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