International Flavors & Fragrances (IFF) will purchase the Israeli Frutarom company for $7.1 billion in the second largest buyout for an Israeli business, the companies announced on Monday.
Frutarom logo Photo Credit: Frutarom
Israel’s Frutarom Industries Ltd will be purchased by the US firm International Flavors & Fragrances (IFF) in the second-largest purchase of an Israeli company, behind Intel’s acquisition of Mobileye in 2017. IFF announced today that the recently reached deal is valued at $7.1 billion in cash and stock.
IFF’s takeover of Frutarom, which has been approved by both boards, is set to be the largest transaction in the rapidly-consolidating food flavoring industry. By acquiring Frutarom, New York-based IFF hopes to gain access to the fast-growing middle-market segment on which the Israeli company focuses.
“Today, we are extremely excited to combine Frutarom with IFF and together create global leadership in natural taste, scent, and nutrition. The growth potential for the combined company is substantial and our shareholders will continue to enjoy this upside,” IFF chairman and CEO Andreas Fibig said. “By combining our deep R&D expertise with Frutarom’s, we are offering our customers a broader range of solutions and accelerating our growth strategy. We believe this combination will lead to faster and more profitable growth, enhanced free cash flow and generate greater returns for our shareholders.”
Frutarom CEO Ori Yehudai, who has overseen the purchase of more than 25 companies since 2015, stated that “Frutarom has had a fascinating journey of accelerated growth, far above our industry benchmarks through our investment in unique technologies and focus on natural products in the growing world of health and taste.”
Frutarom, founded in 1933, is primarily focused on natural products of the fastest-growing segments in the personal care and food industries, as consumers increasingly look to avoid artificial coloring and flavors. With global production plants and development centers, Frutarom sells more than 70,000 products, such as natural colors, health and beauty ingredients, natural food protection and enzymes to mainly mid-sized companies, in 150 countries. The company has been rapidly growing with thirty-nine acquisitions in the past five years.