Israeli flavors and natural specialty fine ingredients company Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; OTCBB:FRUTF) has acquired French natural extracts company René Laurent for $21.3m. Rene Laurent, which also has operations in Morocco, is Frutarom's second acquisition of 2017. The deal is being financed through bank debt.
Rene Laurent has annual sales of $13.2 million.
Founded in 1885, René Laurent develops, produces and markets flavors and natural extracts at two production sites (one focusing on sweet flavors and the other on savory flavors), and an R&D center near Cannes, in Grasse. Rene Laurent also has a production site near Casablanca, Morocco, where natural herbal extracts activity is carried out for both the field of natural flavors and the field of antioxidants for food protection. René Laurent has a broad customer base in Europe, mainly in France, as well as in French speaking countries in Africa such as Morocco, Cameroon and Ivory Coast, and in Asia. René Laurent has 100 employees.
René Laurent’s activity is synergetic with Frutarom’s operations in flavors, which has grown in recent years at a much faster rate than the market, as well as with Frutarom’s activity in natural extracts which is directed towards the areas of both natural flavors and food protection.
Thierry and Jean Louis Laurent, the company’s owners and managers, scions of the Laurent family which founded the operations more than 130 years ago, will contribute from their rich experience towards accelerating the growth in activity of both companies.
Frutarom president and CEO Ori Yehuda said, "The René Laurent acquisition is first acquisition in the field of flavors made by Frutarom in the large and important French market and its first acquisition of a factory for plant extracts in Morocco. We intend to unite René Laurent’s R&D and sales and marketing platforms, in both the areas of sweet flavors and of savory, with Frutarom’s European R&D and sales and marketing platforms in order to realize and leverage the abundant cross-selling opportunities between their activities and to capitalize on the many synergies brought about by combining René Laurent’s activity with Frutarom’s substantial existing activity in Europe. René Laurent’s R&D and sales and marketing platforms in Asia and Africa will be combined with Frutarom’s platforms. The René Laurent factory in Casablanca, Morocco, will be integrated into Frutarom’s natural extracts operations so that Frutarom can benefit from the competitive cost structure and geographic proximity to the agricultural growing areas for very important plants serving as raw materials for our activities.
“The acquisition of René Laurent is the continuation of Frutarom’s implementation of its rapid and profitable growth strategy and fulfillment of its vision ‘to be the preferred partner for tasty and healthy success,’”, said Mr. Yehudai. “The acquisition will contribute to significantly strengthening our position in the French market where until now we have not had local flavors production and will also help expand our activity in the fast growing French speaking countries of Africa and in Asia.”
He added, "This is the second acquisition we are making this year and follows the acquisition of the South African flavors company Unique Flavors. Since the beginning of 2015 we have already acquired 21 companies which have been integrated into our global activity and are contributing and will keep contributing to the continued growth in sales and improved profits and profitability through the maximum utilization of the synergies they bring. We are working on finding and making further strategic acquisitions of companies and activities in our fields of operations. We will continue carrying out our rapid and profitable growth strategy, which is based on combining 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 April 4, 2017
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