Frutarom continues recent spate of acquisitions

By Kacey Culliney

- Last updated on GMT

Frutarom acquires 56% of Slovenian Etol, full takeover bid to follow
Frutarom acquires 56% of Slovenian Etol, full takeover bid to follow

Related tags Flavor

Israel-based flavours, botanicals and speciality ingredients player Frutarom has acquired 56% of Slovenian flavour company Etol for US$24.9m (€19.6m) and will bid for the full takeover in the coming weeks.

Ori Yehudi, president and CEO of Frutarom, told FoodNavigator that it is a strategic acquisition that will harness Etol’s strengths in natural flavours as well as its presence across Eastern Europe.

“Etol is an excellent company that has a very good performance and growth in its products and geography,”​ Yehudi said.

Etol’s net worth was pegged at €28.9m (US$39.3m) at the end of September, 2011.

“It is our first acquisition in Eastern Europe but we already have a strong position in the region, particularly in Russia, the Ukraine and Kazakstan,”​ he said, adding that this deal will boost Frutarom’s presence in areas such as Slovakia, Croatia and Slovenia where it is "not so strong.”

He added that Slovenia is also well placed to access other markets.

Natural flavour strengths

Etol, established in 1924, is focused on natural flavour products for the food and beverage industry, and is experienced in developing fruit based flavours and products, specialising in fruits local to Slovenia.

The president said that Etol is extremely strong in the areas of natural flavours as well as fruit bases, and “we believe that we can leverage this to other markets.”

He noted that the Slovenian company had a very good production site that has been heavily invested in particular on the technology side.

Aggressive growth strategy

2011 saw Frutarom acquire five European and American companies, and just two weeks ago it completed its €4.6m (US$5.8m) deal with British flavour and snack food company, Savoury Flavours.

“The company focus is to grow rapidly but profitably,”​ Yehudi said, and “our goal is to reach $1bn in sales revenue in the next three to four years.”

Frutarom reported a 21.9% growth in sales for the third quarter of 2011, with revenues at approximately US$135.3mn.

The supplier is set to propose a full takeover bid for Etol in the coming weeks; Yehudi could not confirm the exact date, but he said that Slovenian law stipulates that it needs to be done within the next four weeks and that it will happen before then.

When asked if the bid would be accepted, he said: “I believe so because there are not too many shareholders and it makes sense for both parties.”

He added that the company has more acquisitions in the pipeline for 2012 with focus on markets such as Latin America, Mexico and Brazil where it hopes to build a stronger presence.

“We will continue to grow… We believe that 2012 is a challenging year but there are a lot of positive signs from the acquisitions in 2011 and 2012 already,”​ he added.

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