Israel-based flavours, botanicals and speciality ingredients player Frutarom has acquired English flavour-company Aromco Ltd for US$ 25million (€17.4 million).
The acquisition, which is Frutarom’s fourth flavour company buy-out since the start of 2011, represents a strong move by Frutarom to broaden its activity and market share in developing markets.
“The acquisition of Aromco, which is active and growing extensively in developing markets, compliments our strategy and strengthens our presence and market share,” said Ori Yehudai, president and CEO of Frutarom.
Aromco's UK activities are set to be merged with Frutarom's existing activity, said the company.
Frutarom has acquired 100% of Aromco, a company that develops, manufactures and markets flavors for the beverage, dairy, confectionary, bakery and savoury markets. Aromco reported annual sales turnover of US$ 13million (€ 9million) in 2010. The company was founded in 1985 by Keith Brown.
“Frutarom will utilize Aromco’s extensive and excellent Innovation activities in flavour creation, development and application,” added Yehudai.
“Aromco's existing efficient operational activity in England, employing 40 people, will be used to strengthen the merged activities using Frutarom’s Global organization giving operational and cross selling synergies.”
Recent Frutarom performance
Last week, the Israel-based flavours, botanicals and speciality ingredients player reported lower profits in Q2, with raw material hikes cited as the principal cause.
Q2 net profit drop from $13m (€9.08m) to $12.3m (€8.6m) as Frutarom dealt with cost increases in many of its manufacturing materials, although it has in turn also raised prices on its own outputs.
Yehudai said, however, the company remained on track to double revenue in four years with emerging markets increasingly important to deliver the highest growth.
Following the Aromco acquisition, Yehudai said that the Israeli-based company would continue to seek “additional strategic acquisitions of companies and activities in its chosen markets.
“We strive to continue the realization of the excellent pipeline of acquisitions in developed markets in the United States and Western Europe and developing countries focused on Asia, Central and South America and Eastern Europe. Our stable capital structure combined with world leading banks credit lines will enable us to continue carrying out additional strategic acquisitions,” he added.