Frutarom acquires UK flavors maker Aromco for ₤15m

This is the company's fourth acquisition so far this year.

Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; Pink Sheets:FRUTF) has acquired British flavors maker Aromco Ltd. for the food and beverages industry for ₤15 million in cash. This is the company's fourth acquisition so far this year.

According to Frutarom, Aromco had ₤7.7 million in turnover in 2010, after rapid growth over several years. Aromco's owner, Keith Brown, founded the company in 1985. It focuses on markets in Eastern Europe, Africa, and Asia as well as building a market share in the UK. The acquisition will enable Frutarom to broaden its activity and market share in these rapidly growing developing markets, and strengthen its current product supply chain.

Frutarom will also utilize Aromcos extensive innovation activities in flavor creation, development and application and its 40-person operational staff in the UK will join the company.

Frutarom president and CEO Ori Yehudai said, "The acquisition of Aromco, which is active and growing extensively in developing markets, compliments our strategy and strengthens our presence and market share. Aromco's activity in the UK market will be merged with Frutarom's existing successful activity in which Frutarom is already considered a leading player."

Yehudai added, "The acquisition continues the realization of our strategy to integrate internal profitable growth with strategic acquisitions to double the sales turnovers within the next four years." He said that Frutarom will make more strategic acquisitions in chosen markets, including in the US and Western Europe, and in development markets Asia, Central and South America and Eastern Europe. "Our stable capital structure combined with world leading banks credit lines will enable us to continue carrying out additional strategic acquisitions."

Frutarom also published its financial report for the second quarter of 2011. Revenue rose 14.3% to $130.6 million from $114.3 million for the corresponding quarter of 2010. Net profit fell to $12.3 million ($0.21 per share) from $13 million for the corresponding quarter.

Frutarom's share price closed at $10.07 in New York and at $7.80 in London on Friday, giving a market cap of $573 million. The share price rose 2.3% by early afternoon on the TASE to NIS 31.30, one of just ten companies on the Tel Aviv 100 Index to buck the market.

Published by Globes [online], Israel business news - - on August 21, 2011

Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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