Frutarom has a rapid growth strategy in place which consists of bolt-on acquisitions and organic growth across flavours and fine ingredients. It completed two acquisitions in Q1: the industrial spices division of Norway’s Rieber & Son and the assets and activity of UK company EAFI.
The latest acquisition, for which a definitive agreement has been signed, covers flavors, seasoning compounds and functional ingredients for the food industry, with an emphasis on processed meat and convenience food applications.
Frutarom CEO Ori Yehudai said: "The acquired activity holds significant market share in the fields of savory flavors and processed meat in Italy, and it will strengthen Frutarom's positioning among these customers while significantly increasing Frutarom's local presence and market share in this important market.”
The division saw 2010 sales of around US$ 24.3m (€18.3m) and its operational margin was 15%.
The Parma-based business also has good sales in Russia, Ukraine, Poland, Czech Republic and France. The acquisition also includes a state-of-the-art plant in Parma, and R&D laboratories. Some 45 Chr Hansen employees will join Frutarom.
“The acquisition considerably boosts both Frutarom's technological capabilities and its product offering to customers worldwide in the field of savory flavors and functional products, as well as Frutarom's extensive global customer base,” said Yehudai.
The transaction is expected to close in Q4; it is subject to normal competition checks and conditions.
For Chr Hanse, the decision is due on an on-going strategy to focus and invest in areas where it already has, or can grow into, leading positions.
“By reducing complexity, the divesture will enable us to focus even more on building a strong global platform in the meat ingredients business with dedicated focus on meat cultures and natural colours,” said Carsten Hellmann, executive vice
president, global sales at Chr. Hansen.
This week Frutarom reported a strong start to 2011, with Its 6.1 per cent revenue growth in Q1, reaching US$121m. This was due to a combination of organic growth from existing business and the effect of the two acquisitions, as well as favourable currency winds.