Flavors and specialty fine ingredients specialist Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; OTCBB:FRUTF) continues to implement its rapid growth strategy by acquiring FoodBlenders Ltd. Frutarom is buying 100% of the share capital of of the UK company for about $2.4 million (£1.6 million) plus an additional $600,000 (£400,000) in performance-related payments. The transaction was completed upon signing and is being financed independently.
FoodBlenders develops, manufactures, and markets savory solutions which mainly include spice and seasoning mixes, functional ingredients, marinades and sauces for the food industry, with particular emphasis on the convenience foods segment. In 2014, FoodBlenders posted sales of $3 million (£2 million) with profit margins similar to those of Frutarom in the same area of activity. FoodBlenders has a site in England, where it develops, manufactures and markets its products, which is close to Frutarom's Wellingborough site, and it has a wide customer base which includes British food and private label manufacturers.
FoodBlenders' product line and technologies complement the product portfolios and activities of UK-based Savoury Flavours and EAFI which were acquired by Frutarom in 2012 and 2011 respectively, and which also specialize in savory flavor solutions. The proximity to the Frutarom site and the complementary line of products promise to generate synergies between FoodBlenders' activity and Frutarom's expanding savory activity in the UK and worldwide.
Frutarom president and CEO Ori Yehudai said, "This is an additional acquisition of activity in Frutarom's core field of business that will enable us to offer our customers a broader set of solutions. This acquisition provides further reinforcement of our growing activity in the UK where Frutarom has a leading role in the field of flavors.
He added, "The global savory flavors market is growing as a result of the rising standard of living and way of life and the accompanying changes in consumer habits which are boosting demand for processed and convenience foods. Frutarom considers the field of savory flavors a vital strategic growth engine and invests heavily in developing unique innovative products with high added-value at its sites throughout the world. Acquiring FoodBlenders following the previous acquisitions in this segment is another step in establishing Frutarom's leadership in this important area, and we intend to continue investing towards significantly expanding our savory activity in other countries around the world, including through further acquisitions."
"We are continuing to implement our rapid and profitable growth strategy combining internal growth and strategic acquisitions. The acquisition of FoodBlenders is our second acquisition of the year and follows the completion of three acquisitions in 2014."
Published by Globes [online], Israel business news - www.globes-online.com - on February 3, 2015
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