Israel Chemicals buys European dairy proteins co

Stephan Borgas
Stephan Borgas

With plants in Austria and Germany, Prolactal has annual revenue of roughly 100 million.

Israel Chemicals (TASE: ICL: NYSE: ICL) Food Specialties business unit has entered into a share purchase agreement to acquire Prolactal GmbH, and its subsidiary, Rovita GmbH. Prolactal, based in Hartberg, Austria, and Engelsberg, Germany, is a leading European producer of dairy proteins and other ingredients for the food and beverage industries. The transaction is expected to close during the first quarter of 2015, subject to the receipt of regulatory approvals in Austria and Germany. No financial details were given regarding the amount of the acquisition.

Prolactal, a privately-held company with 2014 annual revenue of roughly 100 million, produces and sells an extensive range of functional dairy proteins used broadly in the beverage, dairy and meat industries to stabilize and improve the nutrition of beverages and foods processed under a variety of conditions. The combination of Israel Chemicals existing phosphate capabilities and Prolactals protein capabilities will enable Israel Chemicals Food Specialties to provide innovative, value-added ingredient systems that outperform other solutions available today, as well as open up new market opportunities. The combined operations will also increase Israel Chemicals ability to service its existing clients by offering them a broader selection of texture and stability ingredients, including Prolactals Prolactal and Rovita product lines, to better meet the growing demand by consumers for food and beverages with higher protein levels.

Prolactal, which employees approximately 200 people, operates two plants utilizing state-of-the-art production process technology capable of complete fractionation of milk.

Prolactal CEO Johann Tanzer, has agreed to remain at Prolactal following its sale to Israel Chemicals and he will join the company's Food Specialties senior management.

Israel Chemicals expects the acquisition to contribute substantial sales and marketing synergies in several regions worldwide where there is growing global demand for texture and stability ingredients. The acquisition is expected to be EPS accretive for Israel Chemicals from the first year of consolidation with an EV/expected EBITDA ratio of 9 for 2015.

Israel Chemicals chairman Nir Gilad said, Israel Chemicals board of directors views the Food market as one of the core markets in which we are determined to grow our business significantly. The companys Next Step Forward strategy, which was approved by the Board in Spring 2013, sees major growth potential for the company deriving from Israel Chemicals use of its various raw materials together with technologically advanced solutions to create modern, healthy foods and beverages, and to enter new, growing markets. We believe that the acquisition of Prolactal will serve these purposes, and will provide us with an opportunity to expand synergies within Israel Chemicals resulting in important added-value for the company."

Israel Chemicals CEO Stefan Borgas said, Our acquisition of Prolactal, one of Europes leading dairy protein businesses, is a key milestone in our Next Step Forward strategy, through which we continue to strengthen and grow our core businesses in the food, agriculture and engineered materials markets. This acquisition will help us to build our Food Specialties unit into an integrated, global producer of unique, advanced value-added solutions for the beverage, dairy and meat industries, benefiting from our uniquely broad range of ingredients as well as from our backward integration and advanced technological know-how. We will leverage these capabilities to meet the evolving needs of our existing clients and to enter targeted fast-growing food and nutrition markets, including the dynamically changing markets of China, the Far East and the EU.

Published by Globes [online], Israel business news - www.globes-online.com - on January 28, 2015

Copyright of Globes Publisher Itonut (1983) Ltd. 2015

 
Stephan Borgas
Stephan Borgas
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