FDBusiness.com

International Flavors & Fragrances has completed its $7.1 billion acquisition of Frutarom to become a global leader in taste, scent and nutrition. The acquisition creates a differentiated portfolio with an increased focus on naturals and health and wellness as well as more comprehensive solutions. It also provides opportunities to expand into attractive and fast-growing categories, such as savoury solutions, natural colours, natural food protection and health ingredients. Furthermore, the deal broadens complementary and growing customer base, including enhanced exposure to the fast-growing small- and mid-sized customers, such as private label, while  establishing an enhanced platform to deliver sustainable, profitable growth.

“The coming together of IFF and Frutarom is a momentous achievement. We are excited to be moving forward as one company and pursuing new opportunities that benefit all our stakeholders around the globe,” says IFF Chairman and CEO, Andreas Fibig. “Over the past several months, our integration planning teams have been working to ensure that we capture the best of both companies and create a seamless and efficient transition to achieve both our operational and financial targets for this combination.”

IFF anticipates the combination with Frutarom will translate into accelerated financial performance, with robust top and bottom-line growth. The company expects to generate an average sales growth of 5-7%, and 10% adjusted cash EPS growth, on a currency neutral and pro-forma basis, over the 2019 to 2021 period. IFF also believes it will realize $145 million in cost synergies by rationalizing procurement, optimizing global footprint and streamlining overhead expenses by the third full year after the completion of the merger. The company will be prioritizing repayment of debt and anticipates to be less than 3X net debt to EBITDA in 18-24 months to retain its investment grade rating.