Frutarom Industries Ltd has acquired 70% of the shares of savoury ingredients group GewurzMuhle Nesse (Nesse).
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In a statement, Frutarom said the consideration for the acquisition is €18.41m (US$22.21m) plus a future success fee payment based on continued improvement in Nesse’s future EBIT. The transaction includes a call and a put option, exercisable as of the end of 2007, to acquire the remaining 30%.
Founded in 1880, Nesse is an international group with 120 employees, two production facilities in Germany, and offices and representatives in 20 other countries, mainly in West and East Europe. The company produces savoury flavours, seasonings and specialty functional ingredients.
“We believe that this strategic acquisition is another significant milestone in implementing our rapid growth strategy. The acquisition will significantly strengthen Frutarom’s technological capabilities and savoury offering, as well as our market position in both West and East Europe as a leading flavors supplier, while contributing to our sales turnover and profit,” said Ori Yehudai, president and CEO of the Frutarom Group.
“The Nesse acquisition is another significant step for developing and strengthening Frutarom’s savory offering, and we intend to continue investing in this important segment in the future,” Yehudai added.
Yehudai added that there are strong synergies between the acquired business and Frutarom’s existing activities in the more than 100 countries in which Frutarom operates, especially in Western and Eastern Europe.
The acquisition also includes activities in additional countries where Frutarom has been less active, such as Poland, the Czech Republic, Latvia, Yugoslavia, among others.
Frutarom’s sales for the first nine months of 2005 grew 36.7% compared with the same period in 2004 to reach US$191.2m, while net profit grew sharply by 72.7% compared with the same period in 2004 to reach $22m.
