Flavors and specialty fine ingredients company Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; OTCBB:FRUTF), has acquired the business operations and assets of US company Scandia Citrus LLC. Based in Florida, Scandia Citrus specializes in R&D, manufacture, sales and marketing of specialty solutions in the field of citrus. Frutarom will pay $6 million for Scandia, which had sales of about $8 million in 2014 to leading global customers in the flavor, food and beverages markets. The transaction was completed upon the signing of the agreement and financed through bank debt. This is the fast-growing Israeli flavors and ingredients company's 9th acquisition in 2015.
This acquisition joins that of CitraSource last year which also specializes in citrus and whose production facilities and development labs are also situated in Florida not far from those of Scandia. Scandia has extensive knowledge in citrus, R&D and marketing capabilities, and its ingenuity includes a unique technology for the molecular distillation of citrus oils. Scandia also has global purchasing abilities in the field of citrus from specialty crop growing and supply sources, and combining these with Frutarom's capabilities will further reinforce Frutarom's position as a leading player in citrus.
Frutarom will work towards fully capitalizing the many cross-selling opportunities arising from the acquisition along with combining all of Scandia's activity at its existing site in Florida to attain maximal savings and efficiency.
Scandia's executives Wesley Beck and Dr. Robert Kryger will continue supporting the operations.
Frutarom president and CEO Ori Yehudai said, "Frutarom got its start in the cultivation and extracting of citrus in Israel. Today, 82 years after Frutarom was founded, citrus still makes up a large and important part of our activity and constitutes one of our competitive advantages. The improved back integration brought about with the acquisition of CitraSource last year will now be further reinforced with the acquisition of Scandia and help us continue establishing our position as a global leader in the citrus market while enhancing our offerings of innovative products and the service we provide our customers.
He added, "The acquisition of Scandia provides Frutarom advanced R&D capabilities, unique technology, global purchasing capabilities with emphasis on North, Central and South America, and a leading and experienced management team, and it further enhances our presence in Florida - one of the worldwide centers for citrus. The acquisition represents another milestone is the realization of the strategy for both expanding in the US and broadening our portfolio of natural products in response to market trends and the needs of our customers in the flavors and food and beverages market.
Yehudai said, "The acquisition of Scandia joins the eight acquisitions completed since the beginning of the year and supports the continuing positioning of Frutarom as a leading player in the global market for flavors and specialty fine ingredients. We will continue implementing our rapid and profitable growth strategy, and our strong pipeline of acquisitions will permit the continued realization and execution of further strategic acquisitions of companies and operations in our fields of activity."
Published by Globes [online], Israel business news - www.globes-online.com - on July 29, 2015
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