Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; Bulletin Board: FRUTF) is completing its takeover of Enzymotec Ltd. (Nasdaq: ENZY). Frutarom today reported to the stock exchange that following approval from the two companies' boards of directors, it would go ahead with the acquisition of the 81% of Enzymotec's shares that it does not yet own.
Frutarom, which operates in raw materials and flavor extracts for the food and beverages industry, owns nearly 19% of Enzymotec's shares, which it bought at an average price of $9.60 per share. Following its purchase of these shares, Enzymotec announced its intention of publishing an offer to purchase for the remaining shares at $11.50 per share.
Frutarom, led by CEO Ori Yehudai, is now announcing that it has increased the price for its offer to purchase by 4% to $11.90 per share, which will probably enable the acquisition to go through.
Frutarom will pay $290 million for Enzymotec's remaining shares ($214 million, taking Enzymotec's cash into account). When the measure is completed, Enzymotec will become an indirectly fully owned subsidiary of Frutarom, and its shares will be delisted from Nasdaq.
Frutarom will pay for the acquisition with a loan from a bank or financial institution. Advocates Dan Shamgar, David Glatt, Elad Ziv, and Amir Raz from the Meitar Liquornik Geva Leshem Tal law firm represented Enzymotec in the deal.
The company said, "Enzymotec's activity in the nutrition sector is very synergetic with Frutarom's activity in the special natural raw materials sector with which Enzymotec will merged. Frutarom will utilize and integrate Enzymotec's R&D, marketing, and sales infrastructure and supply chain with its own, while leveraging and taking advantage of the many cross-selling opportunities created by the merger. Frutarom will both expand its customer base and know-how and capabilities, and expand the basket of products and added value of comprehensive solutions for customers of both companies in the pharma, food additives, mother's milk substitutes sectors, in which Frutarom is largely inactive at present, and special food for senior citizens, in which Frutarom is already active."
Yehudai told "Globes," "We did improve the price for the offer to purchase, but in my opinion, the current deal is far better, because we're buying the entire company, not just through an offer to purchase. We have acquired a very interesting company, with very good assets and many opportunities for merging with Frutarom in spheres of great interest to us. The possibility of a full merger will contribute to a substantial reduction in costs in the short term after we complete the merger, which gives us a very large advantage in this form of acquisition."
"Globes": The acquisition will significantly increase your sales rate.
Yehudai: "True. Together with our other acquisitions, we are nearing, and possibly exceeding, $1.5 billion in annual sales. After we put a restructuring plan for Enzyomtec into effect, as we said we would from the beginning, I believe that the company's sales will surge, and Frutarom will of course benefit from it."
Published by Globes [online], Israel Business News - www.globes-online.com - on October 29, 2017
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