Frutarom buys savory assets of Italian co for $35m

This is the specialty fine ingredients and food flavors maker's third acquisition this year.

Specialty fine ingredients and food flavors maker Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; Pink Sheets:FRUTF) has taken another step in achieving its goal of becoming one of Europe's top savory solutions providers, making its third acquisition this year: the savory business and assets of Christian Hansen Italia SpA for €25 million ($35.3 million).

Frutarom says that the business has an annual turnover of €18.3 million. This is the second unit of Denmark's Christian Hansen Holdings A/S (OMX: CHR) that Frutarom has acquired.

Christian Hansen Italia produces savory flavors, seasoning compounds and functional ingredients for the food industry, with a focus on processed meat and convenience food applications. Most of the company's business is with leading Italian meat processors, and it also has customers in France, Poland, Czech Republic, Russia, and Ukraine.

Frutarom said that the acquisition will give it a strong foothold in the Italian market, where it currently has little presence. The assets purchased include a plant in Parma, which Frutarom will integrate with its other European operations.

Frutarom has acquired several European companies in the past few years, including Gewurzmuller GmbH and GewurzMuhle Nesse in Germany, Christian Hansen Deutschland, Oxford Chemicals Ltd. in the UK, and two companies earlier this year, East Anglian Food Ingredients Ltd. in the UK and Rieber Industrial Spices Savory in Norway.

Frutarom president and CEO Ori Yehudai said, “This acquisition is a continuation of Frutarom’s rapid growth strategy, and further solidifies its position as one of the top ten flavor companies."

Frutarom's revenue rose 6.7% to $121 million for the first quarter from $113.5 million for the corresponding quarter, which the company attributes to organic growth and its two acquisitions made during the quarter. Net profit rose 18.2% to $13.1 million ($0.23 per share) for the first quarter from $11.1 million for the corresponding quarter. Yehudai said that the company was seeking to expand its sources of supply and optimally use the diverse global production capabilities to mitigate rising global prices for its raw materials.

Frutarom's share price closed at $9.90 on Nasdaq yesterday, giving a market cap of $567 million, and at $7.80 on the London Stock Exchange. The share price rose 0.2% in morning trading on the TASE today to NIS 34.89.

Published by Globes [online], Israel business news - - on May 26, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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