Glanbia to expand its Nutritional Solutions business with $300 million acquisition
Glanbia plc, the Better Nutrition company, has agreed to acquire US-based Flavor Producers LLC for an initial consideration of $300 million plus deferred consideration. 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 (NS) business.
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.
Hugh McGuire, Chief Executive Officer of Glanbia, commented: “I am delighted to announce the acquisition of Flavor Producers, which represents an important step in the continued growth of our Nutritional Solutions business. This acquisition builds on our existing flavours capability and positions us well to capture long term growth opportunities in the organic and natural flavours segments. M&A is an important part of our growth strategy and this transaction represents a further opportunity to scale our NS business, unlock synergies and acquire unique and complementary capabilities.”
Based in Valencia, California, 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 $86.1 million net sales and adjusted EBITDA (before non-recurring costs) of $19.7 million. The gross assets of Flavor Producers as at February 2024 were $321 million.
The initial consideration is $300 million with an additional deferred payment of up to $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 $248.7 million at the end of FY 2023, a net debt to adjusted EBITDA ratio of 0.5 times and $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.
Glanbia’s current €100 million buyback programme announced on 28 February 2024 is ongoing and is unaffected by this transaction.
