Frutarom acquires Germany's Extrakt Chemie

Ori Yehudai  photo: Eyal Yitzhar

The Israeli flavors and food ingredients company will pay $8.2 million for its 30th acquisition in five years.

Israeli flavors and food ingredients company Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; OTCBB:FRUTF) has acquired 100% of German partnership Extrakt Chemie Dr. Bruno Stellmach GmbH &Co. KG, together with the property on which Extrakt Chemies plant is situated, for approximately $6 million in cash plus the assumption of debt (net) amounting to approximately $2.2 million.

For the fiscal year ended February 2016, Extrakt Chemies revenue was some $10 million. The purchase agreement includes a mechanism for future consideration conditional on the business performance of Extrakt Chemie during 2016 and 2017. The transaction was independently financed.

Extrakt Chemie was established in 1969. It develops, produces and markets specialty solutions of natural extracts, some that include plant-sourced enzymes for use mainly as raw material (API) in the pharmaceutical market, with proven benefits in, among other things, the treatment of liver diseases, digestive problems and the prevention of infections. Besides Germany, it is also active in Denmark, Switzerland, France and Austria and in Australia. It has about 35 employees.

Extrakt Chemies owners, who include its chief technologist and commercial manager, will join Frutarom's managerial ranks in its Specialty Fine Ingredients Division.

Frutarom Group president and CEO Ori Yehudai said, "The acquisition of Extrakt Chemie is a natural continuation in the strengthening of our global infrastructure for natural ingredient extracts while diversifying and broadening our production capacity and capabilities in the field of pharma and natural medications and adding an efficient, high quality and reputable production base to Frutaroms global production network.

The acquisition of Extrakt Chemie is the 30th acquisition we have made in the past five years and the fifth we have completed since the beginning of 2016 in continuing the implementation of our rapid and profitable growth strategy combining strategic acquisitions with internal growth surpassing the rates of growth in markets in which we operate.

"We have an excellent pipeline of future acquisitions which will contribute, along with continued reinforcement of our market leadership in joining together the worlds of natural flavors and health, towards achieving the goals we recently set out: $2 billion in sales by 2020 along with an EBITDA margin of over 22% in our core activities."

Published by Globes [online], Israel business news - www.globes-online.com - on May 3, 2016

Copyright of Globes Publisher Itonut (1983) Ltd. 2016

 
Ori Yehudai  photo: Eyal Yitzhar
Ori Yehudai photo: Eyal Yitzhar
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