Israeli food flavors and ingredients company Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; OTCBB:FRUTF) has announced its seventh acquisition this year, this time in Australia. The company has signed a purchase agreement for the acquisition of 100% of the share capital of Australian company Taura Natural Ingredients Holding Ltd. for approximately $70 million (US) cash.
Taura was purchased without any debts and holding cash amounting to approximately $2.5 million. The purchase agreement includes payment of an additional amount of approximately $3.5 million conditional on Taura's business performance over the 12 month period ending June 30, 2016. The transaction will be financed using bank credit.
Taura was founded in 1973 as part of a New Zealand agricultural co-operative. Today Taura has evolved into a world player in concentrated and texturized fruit ingredients, with manufacturing facilities in New Zealand and Belgium and sales offices in the US and in the UK, with a workforce totaling 130 employees. Taura engages in the development, production and marketing of innovative solutions through its unique Ultra Rapid Concentration technology for delivering natural fruit ingredients. Taura's URC ingredients raise the percentage of the final product's fruit content, improve and enhance flavor and texture as well as lengthen shelf life using only natural ingredients for flavors, colors and preservatives.
Taura's sales in the year to March 2015 were $40 million. Frutarom says that Taura's management team, led by Peter Dehasque, will continue managing the company and driving its strategic expansion.
Frutarom president and CEO Ori Yehudai said, "The acquisition of Taura, a global leader in taste and fruit solutions, is the continuation of Frutarom's implementation of its rapid growth strategy and the realization of its vision 'to be the preferred partner for tasty and healthy success.' This acquisition continues to solidify Frutarom's position as one of the world's top companies in its field and reinforces its presence and standing as a leading global producer for natural flavor and fruit solutions. "The acquisition accelerates the growth of our activity in Asia-Pacific markets, with emphasis on Australia and New Zealand, while for the first time we will have R&D, sales and marketing platforms and a production site located in New Zealand.
"Thanks to Frutarom's proven experience carrying out acquisitions and capitalizing on the abundant synergies and cross-selling opportunities inherent in merging the acquired activity with those of Frutarom Group, both through the expansion of the customer base and by expanding the product portfolio, we are certain that this acquisition too will contribute to the continuation of Frutarom's rapid and profitable growth and generate high value for our customers, employees and investors."
Taura CEO Peter Dehasque said, "This strategic move represents a major milestone in fueling Taura's continued profitable growth into the high value, high growth segments of natural foods and nutritional snacks. Having access to Frutarom's strong scientific and technological expertise will no doubt lead to cross-fertilization and boost our highly specialized portfolio of innovative products further.
"Through its global footprint and infrastructure, Frutarom will enhance Taura's presence dramatically in key growth markets, untapped geographies, new business segments and new customers and will set the scene for solid growth in the US market, one of our key strategic imperatives.
After falling this morning, Frutarom's share price is currently up 2.55% on the Tel Aviv Stock Exchange.
Published by Globes [online], Israel business news - www.globes-online.com - on June 18, 2015
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