IFF completes Frutarom acquisition
International Flavors & Fragrances (IFF) has completed its acquisition of Frutarom, and the new company has “even greater aspirations as a leader in taste, scent and nutrition”, according to IFF Chairman and CEO Andreas Fibig.
The acquisition is expected to help the company increase its health and wellness portfolio, broaden its customer base and expand into new markets, such as savoury solutions, natural colours, natural food protection and health ingredients.
“Over the past several months, our integration planning teams have been working to ensure that we capture the best of both companies and create a seamless and efficient transition to achieve both our operational and financial targets for this combination,” Fibig said. “On behalf of everyone at IFF, we welcome Frutarom and its talented team, and look forward to working closely with all employees to continue to deliver winning products to our customers and maximising long-term value for our shareholders.”
IFF’s combination with Frutarom, which was described by Fibig as a “momentous achievement”, is expected to generate an average sales growth of 5–7%. IFF also believes it will realise $145 million in cost synergies by rationalising procurement, optimising global footprint and streamlining overhead expenses by the third full year after the completion of the merger.
The company agreed to acquire Frutarom in a cash and stock transaction valued at approximately $7.1 billion, including the assumption of its net debt, in May. It plans to prioritise repaying this debt and anticipates it to be less than 3x net debt to EBITDA in 18–24 months to retain its investment-grade rating.
The combined company will be headquartered in New York City but will maintain a presence in Israel. It is now trading on the New York Stock Exchange (NYSE), Euronext Paris and the Tel Aviv Stock Exchange (TASE) under the ticker symbol ‘IFF’.
IFF also highlighted its growth in China by announcing it is opening its second flavours manufacturing facility in the Zhangjiagang Free Trade Zone and a Natural Product Research lab in the Nanjing Life Science Park.
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