Fourth Frutarom Acquisition
This Year
Sonarome Sales in 2014: $12M
Frutarom Industries Ltd. ("Frutarom"), one of the
world's 10 largest companies in the field of flavors and specialty
fine ingredients, continues implementing its rapid growth strategy,
and announces today that it has acquired 60% of the share capital
of the flavors and fragrances company Sonarome Private Ltd.
("Sonarome") in exchange for a cash payment of US$
17.2 million (reflecting a company value of US$ 28.6 million). The
purchase agreement includes an option for Frutarom to acquire the
remaining balance of shares starting two years from now at a price
conditional on the company's business performance. The transaction
is being financed using bank debt.
Sonarome, which was founded in 1981, engages in the
development, production and marketing of flavors and fragrances.
Sales for Sonarome have grown quickly in recent years at a
double-digit annual rate, reaching US$ 12 million in 2014.
Sonarome's manufacturing, marketing, and research and development
are based in Bangalore, India where it has additional production
capacity. In addition to its activities in India, Sonarome has
extensive activity in about 20 African markets, particularly in
Nigeria, South Africa, Ethiopia, Kenya and Mozambique, which also
constitute key growing target markets in Frutarom's growth
strategy. Sonarome has a broad customer base that includes global
and local food and beverages manufacturers.
The founders of Sonarome, T.S. Gulhati and Mrs. R
Gulhati, and their son N. Gulhati, have amassed rich and fruitful
experience in the industry, and those successfully running Sonarome
today will continue in their roles with the company as management
and shareholders.
Ori Yehudai, President and
CEO of Frutarom Group, said: "The acquisition of Sonarome
is the continuation of the Frutarom Group's implementation of its
rapid growth strategy and realization of its vision 'to be the
preferred partner for tasty and healthy success.' Frutarom has set
itself the goal of expanding its activity in the emerging
high-growth markets of India and Africa, both through internal
growth and by means of acquisitions. The acquisition of Sonarome,
one of India's leading domestic companies in the field of flavors
and fragrances, is another key step towards attaining this goal.
Combined with Sonarome's activity, Frutarom will continue to
develop and deepen its presence in the important markets of India
and Africa, capitalize on Sonarome's R&D and sales and
marketing platform and integrate it with Frutarom's global R&D
and sales and marketing infrastructure in order to leverage and
realize the many cross-selling opportunities arising from this
acquisition. We will also work towards leveraging Sonarome's
production and supply chain capabilities to accelerate our growth
in India.
"The acquisition of Sonarome will provide Frutarom
with the advantages of a global manufacturer having a local R&D
and production platform in cutting delivery time and improving
service to customers in the region. It will also contribute towards
accelerating the momentum of expanding activity in the growing
markets of Africa where Frutarom began independent operations four
years ago, which also gained a boost with the acquisition of
JanDeRee in South Africa about two years ago. In addition to its
flavors activity, Sonarome maintains an excellent and growing
infrastructure for activity in the field of fragrances as well,
particularly in India and the emerging markets of Africa, and
Frutarom will work towards utilizing this infrastructure in
penetrating additional emerging markets.
"Frutarom's workforce following the acquisition will
benefit from a substantial boost and reinforcement by experienced
and efficient managers and employees at every level. Sonarome's
outstanding, strong, and seasoned management team will contribute
to Frutarom from its rich experience and together with it will lead
towards continued and accelerated growth in India and Africa."
Mr. Yehudai summarized in saying: "Thanks to
Frutarom's proven experience in executing acquisitions and
realizing the synergetic opportunities inherent in combining the
acquired activities with its own, we are certain that this
acquisition too will contribute to Frutarom's continued rapid and
profitable growth and generate top value for our customers,
employees and investors. Sonarome is our fourth acquisition this
year as we continue to search out and perform further strategic
acquisitions of companies and operations in our fields of activity,
with special focus on activities and markets exhibiting high rates
of growth." About Frutarom: Frutarom (LSE:FRUT)
(TASE:FRUT) is a multinational company operating in the global
flavors and fine ingredients markets. Frutarom has significant
production and development centers on four continents and markets
and sells the over 31,000 products it produces to over 16,000
customers in more than 150 countries. Frutarom's products are
intended mainly for the food and beverages, flavor and fragrance
extracts, pharmaceutical, nutraceutical, health food, functional
food, food additives and cosmetics industries.
Frutarom, which employs approximately 3,100 people
worldwide, has 2 main core activities:
- The Flavors Activity which develops, produces and markets
flavor compounds and food systems.
- The Specialty Fine Ingredients Activity, which develops,
produces and markets natural flavor extracts, natural functional
food ingredients, natural pharma/nutraceutical extracts, natural
food colors, natural algae based biotechnical products, natural
antioxidants used in natural food protection systems, aroma
compounds, essential oils, unique citrus products, natural gums and
resins. The Specialty Fine Ingredients products are sold primarily
to the food and beverages, flavor and fragrance,
pharmaceutical/nutraceutical, cosmetics and personal care
industries.
Frutarom's products are produced at its plants in the
US, UK, Switzerland, Germany, Spain, Italy, Slovenia, Russia,
Turkey, Israel, South Africa, China, Guatemala, Peru, Chile and
Brazil. The Company's global marketing organization encompasses
branches in Israel, the US, the UK, Switzerland, Germany, Slovenia,
Belgium, the Netherlands, Denmark, France, Italy, Spain, Hungary,
Romania, Russia, the Ukraine, Poland, Kazakhstan, Belarus, Turkey,
Brazil, Mexico, Guatemala, Costa Rica, Peru, Chile, South Africa,
China, Japan, Hong Kong, India and Indonesia. The Company also
works through local agents and distributors throughout the
world. For further information, please visit our website at:
www.frutarom.com.
CONTACT: ir@frutarom.com, +972-9-9603800
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