Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; Pink Sheets:FRUTF) has acquired Brazil's Mylner Indústria e Comércio Ltda. For 27.1 million reals ($15.7 million). Mylnar, founded in 1974, develops and produces sweet flavors for beverages and baked goods, and natural flavor products. This is Frutarom's third acquisition so far in 2012, eighth acquisition in the past year, and its first in Latin America. Frutarom president and CEO Ori Yehudai said that he plans to make more acquisitions in the region.
Frutarom said that the acquisition of Mylner would boost its customer base, product portfolio and the scope of its sales in the flavors market. It will also expand the company's operations and market share in the growing Brazilian market and Latin American markets, in order to expand its business in the region.
Mylner has 70 employees at its Sao Paulo plant, and owns land for future expansion. Its customers are food manufactures across Latin America. Frutarom says that the company's revenue rose 43% over the past four years from $6.8 million in 2007 to $11.4 million 2011.
Yehudai said, "The acquisition of Mylner is an important strategic step and a significant first entry into the taste solutions market in the important and large Brazilian and Latin American markets, which strengthens its presence and market share in these high growth potential markets.
"We believe that the sales in the emerging markets in which Mylner acts will continue to grow at high rates over the next few years as a result of the shift to processed foods and beverages and from changes in consumer demands in this region. Frutarom will act and invest in the strengthening of its research and development, production, marketing and sales in Brazil and in other important target countries in Latin America also through additional strategic acquisitions in the region."
Frutarom's share price rose 1.2% by mid-afternoon on the TASE today, after closing at $8.50 in New York yesterday, giving a market cap of $491 million, and remaining unchanged at ₤7.80 in London.
Published by Globes [online], Israel business news - www.globes-online.com - on February 7, 2012
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