Frutarom Industries has signed an agreement to acquire 100% of the share capital of the German companies Gewurzmuller GmbH and Blessing Biotech GmbH, for a cash payment of US$67m.
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In a statement, Frutarom said the acquisition agreement also includes an earn out mechanism for a future payment, so that the final consideration to be paid will reflect a value for the Gewurzmuller Group based on a 7.1 multiple of the 2007 EBITDA.
The Gewurzmuller Group’s sales for 2006 totalled approximately US$65m. Frutarom said it used long-term loans to finance the acquisition.
Gewurzmuller, which employs 190 people, develops, produces and markets savoury solutions, including savoury flavours, seasoning compounds and functional ingredients for the food industry, with special emphasis on the fields of processed meat and convenience food.
Blessing Biotech develops, produces and markets starter cultures, which are used to manufacture food, especially meat, dairy and baked goods. Starter cultures enable food manufacturers to control flavour, colour, texture and shelf life.
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By GlobalDataThe Gewurzmuller Group operates two production sites in Stuttgart, Germany.
Ori Yehudai, president and CEO of the Frutarom Group said: “The acquisition of Gewurzmuller continues the implementation of Frutarom’s rapid growth strategy and of realizing its vision.
“This is an important strategic and significant acquisition that further establishes Frutarom’s position as one of the ten largest global leaders in the field of flavours and enhances its presence and position as a leading global producer of savoury flavours.
“Gewurzmuller’s activity is especially synergetic and will be integrated with the successful activity of the German company Nesse, which was acquired by Frutarom at the beginning of 2006, and with Frutarom activity in Israel. The acquisition considerably boosts both Frutarom’s technological capabilities and its product offering to customers worldwide in the field of savory flavors and functional products, as well as Frutarom’s extensive customer base.”
Yehudai added: “Above and beyond the extensive synergy existing in the German market, there is synergy between the Gewurzmuller group’s and Frutarom’s activity in many additional countries, particularly in the western and eastern European markets. We intend to take advantage of our global marketing and sales infrastructure to leverage and realise the many cross selling opportunities created by this acquisition, by broadening both the customer base and the product portfolio.”
