Israeli flavor and fragrance firm Frutarom is to be acquired by Europe-based International Flavors and Fragrances (IFF), in a deal worth $7.1 billion. Fruatrom, which has plants in countries throughout the world, has been a serial acquirer, buying up smaller firms in the flavor and fragrance industry and creating a huge conglomerate that has a presence in dozens of countries throughout the world, with production and development centers on six continents. It markets and sells over 70,000 products to more than 30,000 customers in over 150 countries. IFF is the biggest company in the world in the flavors and fragrances space.
Frutarom is primarily focused on natural products, which drive more than 75 percent of its sales, with a product portfolio consisting of integrated solutions combining taste and health, natural and clean label products. Frutarom expects sales of above $1.6 billion in 2018; the company aims to reach sales of $2.25 billion by 2020.
In a statement, Ori Yehudai, president and CEO of Frutarom remarked, “Frutarom has had a fascinating journey of accelerated growth, far above our industry benchmarks through our investment in unique technologies and focus on natural products in the growing world of health and taste. Today, we are extremely excited to combine Frutarom with IFF and together create global leadership in natural taste, scent and nutrition. The growth potential for the combined company is substantial and our shareholders will continue to enjoy this upside.”
“This transaction is a big win and a fantastic outcome for shareholders, customers and employees of both companies,” said IFF Chairman and CEO, Andreas Fibig. “Frutarom has an extremely attractive product portfolio, including broad expertise in naturals and diverse adjacencies with capabilities beyond our core taste and scent businesses. It also has significant exposure to complementary and fast-growing small- and mid-sized customers. By combining our deep R&D expertise with Frutarom’s, we are offering our customers a broader range of solutions and accelerating our growth strategy. We believe this combination will lead to faster and more profitable growth, enhanced free cash flow and generate greater returns for our shareholders.”