Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; Pink Sheets:FRUTF) has acquired East Anglian Food Ingredients Ltd. (EAFI) for ₤3 million. Frutarom will finance the acquisition from its own sources.
EAFI had an estimated ₤5.4 million revenue in 2010. Founded in 1979, EAFI develops, manufactures, and markets savory taste products, including flavors, seasonings, and ingredients for the food industry. The company specializes in the convenience food, snacks, and processed meat and fish sectors.
Frutarom is acquiring EAFI's factory and R&D facility in the UK. EAFI has 35 employees. Frutarom said that EAFI's activities are synergetic with its own business in the UK and Europe, which have grown considerably following a number of acquisitions, including Oxford Chemicals Ltd. of the UK, Israeli company Rad Natural Technologies Ltd., and three German companies, Christian Hansen, Gewurzmuller GmbH and GewurzMuhle Nesse between 2005 and 2009.
This is Frutarom's second acquisition in a month. In late December, it acquired the business and fixed assets of Norway's Rieber Industrial Spices Savory activity from Rieber & Son ASA $4.2 million (Krona 25 million).
Frutarom president and CEO Ori Yehudai said, "The acquisition of EAFI is a continuation of Frutarom's rapid growth strategy... It strengthens both Frutarom's technological capabilities and its comprehensive product offering to our customers in the fields of savory flavors and functional foods around the world. The acquisition of EAFI will allow Frutarom to widen its global customer base via a stronger entrance into the UK market. Frutarom is the leading local flavor manufacturer in the UK, however until now our main focus in that market has been on the sweet spectrum of flavor."
Yehudai continued, “We are continuing to pursue additional strategic acquisitions and implementing our rapid growth strategy combining internal profitable growth with strategic acquisitions. This combination will allow us to again double Frutarom‟s turnover within the next four years to US$ 1 billion. Our sturdy capital structure, low net debt level and the strong cash flow we achieve, along with the support of leading banks, will allow us to continue executing acquisitions."
Frutarom's share price closed at $10.80 in New York and at $7.80 in London on Friday, giving a market cap of $631 million. The share price rose 0.5% in early trading on the TASE today to NIS 38.25.
Published by Globes [online], Israel business news - www.globes-online.com - on January 23, 2011
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