Frutarom Acquires BSA of Canada Which
Specializes in Unique Savory Solutions
BSA Sales Amounted to CAD 37M (Approx.
USD 34M) in 2014
Strategic Acquisition for Frutarom That
Expands Its Capabilities and Raises Its Market Share in the Field
of Savory Solutions in North America and India
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 signed a purchase agreement for the
acquisition of 95% of the share capital of Investissements BSA Inc.
("BSA") in exchange for a cash payment of CAD
42.75 million (approximately USD 35.6 million). The purchase
agreement provides for the acquisition of the remaining balance of
shares starting two years from now at a price conditional on the
company's business. The transaction is being financed using bank
debt and will be completed within the next few weeks.
BSA was founded in 1989 by Mr. Marcel Baril with his rich and
successful industrial experience, has a large and efficient
production site in Montreal and employs around 140 people. BSA's
main activities include the development, production and marketing
of unique and innovative savory flavor solutions (the non-sweet
spectrum of flavors) that include seasoning blends and functional
ingredients for the food industry, with particular focus on the
areas of processed meats and convenience foods. BSA sales in 2014
(for the 12 months ending Aug. 2014) reached approximately CAD 37
million (approximately USD 34 million).
In addition to its North American operations, in recent years
BSA has developed an interesting operation in India in which it
holds a 90% stake, with 10% owned by a local partner who manages
its activity. The company in India has local production facilities
and supplies customers in the Indian market with savory flavor
solutions, and also assists the group in procuring raw materials in
source countries. BSA's activity in India will contribute towards
strengthening and securing Frutarom's position in the growing
Indian market and joins the growing activity of the Indian company
Sonarome whose acquisition was announced by Frutarom just several
days ago.
The worldwide market for savory flavors is growing due to the
rise in standard of living and lifestyle along with changes in
consumer habits leading to higher demand for processed and
convenience foods, both in home consumption and eating out.
Frutarom considers the field of savory flavors an important
strategic growth engine and in 2006 began substantially expanding
in this field through the acquisition of the savory activities of
the Nesse group, Gewurzmueller and Christian Hansen in 2006, 2007
and 2009 respectively, the acquisition of EAFI and the savory
activities of Rieber and of FSI in 2011, the acquisition of Savoury
Flavours in 2012, the acquisition of 75% of the Russian company PTI
in 2013, and the acquisition of FoodBlenders in 2015. Frutarom sees
great importance for this field, in which now holds a leading
position in Europe and invests heavily in developing unique
innovative products with high added value at its sites throughout
the world. The activity of BSA is synergetic to a large extent with
Frutarom's global savory activity and will enable Frutarom to
reinforce its supply of products in the field of savory and to
continue expanding and deepening its activity and market share in
Canada, North America and in India.
Mr. Baril and the four partners currently running BSA
successfully will continue in their management roles with the
company, with some of them as shareholders as well.
Ori Yehudai, President and CEO of
Frutarom Group, said: "The acquisition of BSA is the
continuation of Frutarom Group's implementation of its rapid growth
strategy and the realization of its vision 'to be the preferred
partner for tasty and healthy success.' This is an important and
significant strategic acquisition that solidifies Frutarom's
position as one of the world's top companies for flavors, and
reinforces its presence and standing as a leading global producer
of savory solutions. Until now Frutarom has already enjoyed market
leadership for savory solutions in Europe, and the acquisition of
BSA is expected to boost its position in this field in North
America and India as well.
"Thanks to Frutarom's proven experience carrying out
acquisitions and capitalizing on the abundant synergies and
cross-selling opportunities inherent in merging the acquired
activity with those of Frutarom Group, we are certain that this
acquisition too will contribute to the continuation of Frutarom's
rapid and profitable growth and generate high value for our
customers, employees and investors," said Mr. Yehudai. "Frutarom
intends to utilize and combine BSA's sales and marketing platform
in Canada and India together with Frutarom's sales and marketing
infrastructure in the United States and around the world in order
to realize and leverage the many cross-selling possibilities
created by this acquisition by expanding both the customer base and
the product portfolio.
"Frutarom considers the field of savory flavors a key strategic
growth engine and the BSA acquisition, following its previous
acquisitions in this field, is a further step towards reinforcing
Frutarom's leadership in this important field and we intend to
continue investing towards substantially expanding our savory
flavor activities in additional countries around the globe,
including through acquisitions," added Mr. Yehudai. "These days we
are completing construction of a new modern plant in China which
will also be capable of producing savory products and is designed
to provide a response to customer needs in this field in the Asian
market."
Mr. Yehudai concluded by saying: "We are continuing to implement
our rapid and profitable growth strategy. The acquisition of the
BSA group is the fifth acquisition we have executed this year and
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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