Israeli flavors and specialty fine ingredients company Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; OTCBB:FRUTF), has acquired Brazilian company Nardi Aromas Ltda for $1.6 million. The transaction, which is being independently financed, is Frutarom's seventh acquisition this year, as the company pushes ahead with its worldwide growth strategy.
Nardi was founded in 1971 and has a production site near Sao Paulo and Frutarom’s Brazilian production site. Nardi has 14 employees and specializes in the development, production and marketing of natural traditional Brazilian flavors and plant-based herbal extracts for the alcoholic drinks and carbonated beverages markets, which have enormous potential for worldwide sales. Nardi has dozens of longtime customers including leading Brazilian beverage companies and revenue for the 12 months ending in August 2016 was $1.5 million. Nardi's key personnel will continue serving in their roles.
Frutarom sees great importance in expanding its activity in Latin America with emphasis on Brazil, the region’s most significant market. Frutarom had already acquired in 2012 Brazilian company Mylner which specializes in sweet flavors for beverages and baked goods, as well as in natural extracts from plants and natural flavor products.
In 2013, Frutarom acquired Aroma in Guatemala that specializes in producing sweet flavors for beverages, dairy products, confectionery and snacks, and in 2014 Frutarom acquired the natural flavors and colors division of Montana of Peru which produces natural flavors and colors for the food industry and has significant activity in Peru and in Chile. Also, in recent years Frutarom has taken steps to expand its activity in Latin America on the basis of its local and global production infrastructure and R&D and marketing capabilities and by exploiting synergies that came about through the acquisitions it performed. Today the company has growing activity in most countries of the region. The Brazilian beverages market is the sixth largest beverages market in the world and estimated at upwards of $110 billion as of 2015 with a projected growth rate of about 6% in local currency terms. Frutarom CEO Ori Yehudai said, "This is the seventh acquisition we have made since the beginning of the year. We are working on seeking out and executing additional acquisitions of companies and activities in our fields of activity, with special focus on high-growth markets. We have a strong pipeline of potential strategic acquisitions. We will continue carrying out our rapid profitable growth strategy, which is based on profitable internal growth and strategic acquisitions, in order to achieve the targets we recently set: sales of at least $2 billion with an EBITDA margin of over 22% in our core activities by the year 2020.”
Published by Globes [online], Israel business news - www.globes-online.com - on October 13, 2016
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