Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; Bulletin Board: FRUTF) is continuing its global acquisition campaign. The company, which produces flavors and spices for the food and beverages industry, today reported that it had acquired full ownership of Hong Kong company Inventive for $17 million, including the assumption of the acquired company's debt. Frutarom said that the acquisition was being financed with a bank loan, and included a mechanism for future payments based on Inventive's business performance over the next three years.
Founded in 1998, Inventive develops, manufactures, and markets flavors using technologies that facilitate the combination of flavors with fruit components, chocolate, grains, and nuts in many food products, particularly dairy products, ice cream, pastries, and beverages. The company's revenue in November 2014-October 2015 totaled $13.7 million.
"To reinforce business in China and the east"
Inventive has sales offices in Hong Kong and Shanghai and a production facility in Zhaoqing in southern China. Its customer base includes global food and beverage manufacturers operating in China, as well as local food and beverage manufacturers exporting their products to Southeast Asia, the Middle East, and South America. According to Frutarom president and CEO Ori Yehudai, the acquisition of Inventive is a continuation of the implementation of the company's strategy designed to achieve rapid growth. He said, "We have made it a main goal to expand our activity in the emerging markets of China and Southeast Asia with their high rates of growth, both through internal growth and by means of acquisition." He noted that Inventive was Frutarom's 12th acquisition this year.
"The acquisition of Inventive, one of China's leading local companies in flavors and flavor inclusions, is another important step towards attaining this goal. Growth rates for processed food consumption in China continue to be high and stem from the urbanization of Chinese society, the entry of women into the workforce, and changes in the lifestyle and spending habits of the Chinese consumer. Processed food consumption in China is projected to surpass that of the United States in 2015 while the average Chinese consumer consumes just around one quarter of the processed food consumed by the average American consumer, so the potential for continued growth is quite strong."
Published by Globes [online], Israel business news - www.globes-online.com - on December 9, 2015
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