FDBusiness.com

Frutarom Industries, one of the world’s ten largest companies in the field of flavours and specialty fine ingredients, is continuing with the implementation of its strategy for rapid and profitable growth with two more acquisitions.

The company has acquired Ingredientes Naturales Seleccionados of Spain (Ingrenat) for $8 million (€7 million) plus up to $1.1 million (€1 million) additionally, depending on Ingrenat’s 2015 performance. Ingrenat specializes in the research and development, production, and sales and marketing of natural extracts from plants which include, among others, paprika rosemary, bixin, alfalfa and more which deliver taste, colour, and antioxidant activity solutions for the food industry. Numbering among its customers are food manufacturers and leading flavour, fragrance, and natural colour producers.

Ingrenat’s sales grew 10% in 2014 to about $9.8 million (€7.4 million). The value of its net assets (not including cash or debt) in 2014 stood at $6.9 million (€5.6 million). Ingrenat’s operations will be integrated into the activities of Frutarom’s Specialty Fine Ingredients division with which it shares similar profitability margins. The acquisition will be funded through bank financing.

The acquisition of Ingrenat is a continuation of the implementation of Frutarom’s strategy of deepening and expanding in the plant-based segment of natural food colours and antioxidants and it will continue investing towards substantially expanding its global activity in this important and growing field. The natural food colours activity joins the natural colours activity of Montana Food, which was acquired in September 2014, and of Vitiva for which the purchase agreement was signed in December 2014. Ingrenat’s activity in antioxidants based on natural substances, particularly in the field of food preservation and protection and extension of shelf life, further reinforces Frutarom’s line of solutions in this area which

Ingrenat has 28 employees, an R&D and sales and marketing centre, and a production site in Murcia, Spain with large production capacity and the possibility of extensive expansion, of which Frutarom will look to gain full advantage and achieve significant operational savings. Frutarom will also work towards realizing the cross-selling opportunities inherent in the acquisition.

Ori Yehudai, president and chief executive of Frutarom Group, says: “Frutarom is a leading global producer of natural specialty fine ingredients and the acquisition of Ingrenat fits in well with our rapid and profitable growth strategy which is based on natural flavour, health and colouring products. We are convinced this acquisition too will contribute to Frutarom’s continuing rapid and profitable growth as well as generate high value for our customers, our employees, and our investors.”

Meanwhile, Frutarom has also acquired UK-based FoodBlenders for up to $ 3 million (£2 million) Established in 1998, FoodBlenders develops, manufactures, and markets savory solutions which mainly include spice and seasoning mixes, functional ingredients, marinades and sauces for the food industry, with particular emphasis on the convenience foods segment. In 2014 FoodBlenders posted sales of approximately $3 million (£2 million) with profit margins similar to those of Frutarom in the same area of activity. FoodBlenders has a site in England where it develops, manufactures and markets its products which is located within close proximity of Frutarom’s Wellingborough site, and it has a wide customer base which includes British food and private label manufacturers.

FoodBlenders’ product line and technologies complement the product portfolios and activities of UK-based Savoury Flavours and EAFI which were acquired by Frutarom in 2012 and 2011 respectively and which also specialize in savoury flavour solutions. The proximity to the Frutarom site at Wellingborough and the complementary line of products promise to generate synergies between FoodBlenders’ activity and Frutarom’s expanding savory activity in the UK and throughout the world.

Ori Yehudai remarks: “This is an additional acquisition of activity in Frutarom’s core field of business that will enable us to offer our customers a broader set of solutions. This acquisition provides further reinforcement of our growing activity in the UK where Frutarom has a leading role in the field of flavours.”

He adds: “The global savory flavors market is growing as a result of the rising standard of living and way of life and the accompanying changes in consumer habits which are boosting demand for processed and convenience foods. Frutarom considers the field of savory flavors a vital strategic growth engine and invests heavily in developing unique innovative products with high added-value at its sites throughout the world.”