FDBusiness.com

Archer Daniels Midland Company is acquiring WILD Flavors, one of the world’s leading suppliers of natural ingredients to the food and beverage industry, in an all-cash deal valued at €2.3 billion. ADM will pay €2.2 billion to WILD Flavors shareholders Dr. Hans-Peter Wild and funds affiliated with Kohlberg Kravis Roberts & Co. L.P., and assume approximately €0.1 billion of net debt. The transaction is contingent on regulatory approvals and is expected to close by year end.

“This acquisition expands ADM’s ability to serve customers’ evolving needs today and well into the future,” says ADM Chairman and CEO Patricia Woertz. “Natural flavor and ingredients is one of the largest and fastest-growing consumer trends in both developed and emerging markets, and WILD Flavors is the world’s leading provider of natural flavor systems to the food and beverage industry.”

WILD Flavors, with more than 3,000 customers worldwide and estimated 2014 net revenues of about €1 billion, offers food and beverage companies full flavor and ingredient solutions—known as flavor systems—and fruit juice concentrates and blends, as well as other food and beverage ingredients, including natural flavors and extracts, mint oils and flavors, colors from natural sources, sweetening systems, seasonings, specialty ingredients, taste modifiers, and fermentation technologies.

“Together, ADM and WILD Flavors will create one of the leading flavor and specialty ingredient companies in the world, with sales approaching $2.5 billion and significant room to grow,” says Patricia Woertz. “WILD Flavors will be able to reach more customers with an expanded portfolio of innovative ingredients. And ADM, with our own sizeable specialty ingredient business, will have an enhanced platform for the commercialization of our higher-margin food and wellness ingredients.

“Together, we will be uniquely positioned to offer a broad range of customers—from the largest CPG’s to fast-growing innovators—comprehensive systems-based solutions for food, beverage and personal care products. With our combined global networks, world-class research & innovation capabilities, WILD Flavors’ natural flavor systems, and ADM’s texture, nutrition and functional solutions, we will create an unmatched capability to respond to local consumer preferences and offer complete food solutions that taste great.

“The addition of WILD Flavors balances and extends our value chain,” Patricia Woertz adds. “It is consistent with our long-term strategy to diversify the crops we process and expand and diversify our product portfolio. It complements the ingredient, organic-growth investments we’ve recently made—including our Brazil protein complex and soluble-fiber expansion in China. And it is consistent with actions we’ve taken to dampen the volatility of our earnings mix and deliver on our commitment to profitable growth. The acquisition will meet our return objectives, with estimated cost and revenue synergies of €100 million by year three.”

ADM employs 31,000 people around the globe in converting oilseeds, corn, wheat and cocoa into products for food, animal feed, industrial and energy uses. With more than 270 processing plants, 470 crop procurement facilities, and the world’s premier crop transportation network, ADM sells its products in more than 140 countries.

ADM’s Foods & Wellness group offers a range of innovative specialty ingredients and products for the beverage, meat, snack, bakery, cereal, wellness and personal care markets. As a global market leader in food-grade proteins, ADM’s Foods & Wellness group also markets numerous health and nutrition products, lecithin, acidulants, hydrocolloids and polyols. Some of those products include Textura™ protein and fiber pieces, Clarisoy™ beverage protein, and Ultralec® lecithin.

WILD Flavors operates production sites in Heidelberg-Eppelheim, Germany (Rudolf Wild GmbH & Co. KG) and Erlanger, Kentucky, USA (WILD Flavors, Inc.). Thirteen further production sites are located in Europe, USA, Canada, China, Japan, India, Brazil, and Dubai.