Investor group buys controling stake in Solbar

By Jess Halliday

- Last updated on GMT

Related tags: Solbar, Soybean

A group of investors has acquired a 51 per cent stake in the share
capital of Solbar, a move expected to improve the Israeli soy
protein company's financial position and balance sheet.

Solbar, which started out as a kibbutz-run business, experienced a turbulent two years following its initial public offering to the Israeli Stock Exchange in 2004. However last year it was back on track, with sales of specialty soy proteins reported to have increased 20 per cent on the previous year. The group, led by the First Israeli Turnaround Enterprise (FITE), Mivtach Shamir Group and Ori Yehudai, CEO of Frutarom, is said to "bring a wealth of experience which may contribute to strengthening Solbar's business results and will further take an active role in the management of the company".​ A Solbar representative was not available to give more details on the investors' foreseen management role. As part of the acquisition agreement, the group has invested NIS 80m (around US$20m) towards redeeming all of the company's outstanding debentures. Today's news follows a previous announcement in July 2006, that the FITE Fund, controlled by Ishav Davidi, had reached an agreement with Kibbutz Hazor to invest NIS 80m (c €14.5m) in Solbar for a 47.5 per cent stake close to the market opening price. Solbar's post IPO recovery was attributed largely to a strategic decision to source all its non-GMO, identity preserved soybeans for specialty isoflavone products from the US on the grounds of better quality and yield. Issues over soybean sourcing had an impact on the financial performance of the newly public company: over 90 per cent of its soybeans were sourced from Brazil, and the darker colour of the beans affected product quality and functionality. A low point followed some poor quality batches, and at the end of 2005 a restructuring programme was initiated. "Overnight this put us in a better position in the market,"​ Gary Brenner, Solbar's VP sales and marketing told last November, adding that the company regained market share in almost every market. "We are now in a position to be a supplier to major food companies,"​ said Brenner. "We think we will be a significant number three player in specialty proteins."​ The top two spots in the market are occupied by US companies ADM and Solae. Moreover, Solbar has been focusing its attentions on growth potential from the US market and on remodelling itself as a supplier of solutions - rather than simply a soy supplier. Solbar now has the ability to offer the full range of soy proteins for non-meat uses such as bars, vegetable analogues, supplements and beverages. It also offers sot isolates, textured soy concentrates, and soy isoflavones for a range of products and markets.

Related topics: Market Trends, Proteins

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