FDBusiness.com

Frutarom Industries, one of the world’s 10 largest companies in the field of flavours and specialty fine ingredients, continues its momentum of acquisitions and the implementation of its rapid and profitable growth strategy: The company has agreed to purchase 100% of the shares of the Irish company Redbrook Ingredients Services for approximately US$44.8 million (€40 million). The purchase agreement includes a mechanism for an additional consideration based on Redbrook’s future business performance. The transaction was financed through bank debt.

Redbrook was founded in 1987 and has an R&D and sales and marketing centre and an efficient production site near Dublin, Ireland as well as a production unit and R&D and sales and marketing centre in Daventry, England, near Frutarom’s site at Wellingborough, England. Redbrook has 39 employees. Redbrook’s main activity is the development, production and marketing of innovative specialty savoury taste solutions, which includes seasoning and functional blends, marinades, glazes, cures and specialty ingredients for food processors. Redbrook sales for the 12 month period ending June 2016, according to current exchange rates, amounted to approximately US$25.4 million (€22.7 million). In the last three years Redbrook has exhibited double digit growth.

The global market for savoury flavours is growing due to the rise in standard of living and changes in lifestyle and consumer habits bringing about increased demand for processed and convenience foods both for home consumption and for eating out. Frutarom considers the field of savoury flavours an important growth engine for itself and about 10 years ago embarked on a strategic course of action to significantly build up its global savoury activity by acquiring leading companies in their fields possessing unique solutions and a strong position in strategic target markets.

Among the companies and activities acquired are: Nesse, Gewürzmüller and the savoury activity of Chr. Hansen in Germany (in 2006, 2007 and 2009 respectively); EAFI in the UK, the savoury activities of Rieber in Norway, US-based FSI and the savoury activities of Chr. Hansen in Italy in 2011; Savoury Flavours in the UK and ETOL in 2012; JannDeRee in South Africa and PTI in Russia in 2013; FoodBlenders in the UK and BSA of Canada, with activity also in India, in 2015; and AMCO in Poland and Wiberg of Austria in 2016.

Frutarom sees great strategic importance for this field, in which it now holds a leading market position, and focuses on developing unique innovative natural and healthy products with high added value at its sites throughout the world. Redbrook’s activity is largely synergetic with Frutarom’s global savoury activity and will enable Frutarom to continue expanding and deepening its activity and market share in the UK and Ireland, and reinforce its supply of savoury products while leveraging Redbrook’s specialized knowhow and technology. Frutarom intends to make the most of its global sales and marketing infrastructure in leveraging and realizing the many opportunities generated by this acquisition by expanding the customer base and product portfolio.

The CEO of Redbrook, Kieran Fox, who has many years of experience and has headed the company’s growth in recent years, will continue in his role and will join Frutarom’s Flavors activity management.

Ori Yehudai, President and CEO of Frutarom Group, comments: “The acquisition of Redbrook is the continuation of the implementation of Frutarom Group’s rapid profitable growth strategy and the realization of its vision ‘to be the preferred partner for tasty and healthy success.’ This is an important acquisition in establishing Frutarom’s standing as one of the world’s largest and leading companies for flavors, and strengthens its presence and position as a top global producer of natural, healthy and innovative savory taste solutions. The acquisition reinforces our market leadership in the UK and constitutes Frutarom’s first entry into the Irish market, also giving us the advantages of a global manufacturer having a local R&D, production and sales platform for shortening delivery times and improving service to customers of the region.”

He adds: “We are working on seeking out and executing additional acquisitions of companies and activities in our fields of activity, with special focus on high-growth markets, and we have a strong pipeline of potential strategic acquisitions. We will continue carrying out our rapid profitable growth strategy, which is based on profitable internal growth and strategic acquisitions, in order to achieve the targets we recently set: sales of at least US$2 billion with an EBITDA margin of over 22% in our core activities by the year 2020.”

Frutarom has significant production and development centres on all six continents and markets and sells over 49,000 products to more than 28,000 customers in over 150 countries.