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Frutarom Acquires FSI

Posted: September 14, 2011

Previously: Frutarom Acquires Aromco

Frutarom (Haifa) has acquired Flavor Systems International Inc. (FSI; Cincinnati) for $35.3 million and will pay $6.5 million for real estate assets owned by related companies. According to a Frutarom press release, "The final price of the transaction will be determined in accordance with an agreed mechanism related to future earnings. Therefore, the consideration of the acquisition may range from $29.3 million to $45.3 million."

The move boosts Frutarom's US activities in sweet and savory flavors for the food and beverage markets. The acquisition includes a production site that will expand activities into flavored coffee and shakes and savory flavors. Marketing, sales, R&D, production and supply chain will be consolidated.

Of the move, Ori Yehudai, president and CEO of Frutarom, said, "I am glad to announce the important acquisition of the US company, Flavor Systems, which considerably expands our activities in USA which is the world's largest flavor market and supports Frutarom's future strengthening and positioning in the global market. We continue the successful implementation of our rapid growth strategy, which combines profitable internal growth in the core segments with strategic acquisitions.

“Flavor Systems presents an impressive and growing activity in a range of market segments and utilizes unique technology to achieve rapid growth. The acquisition enables us to expand our fields of activity in the USA and offer a wide and innovative product range to our customers, while entering the savory market, which we already lead in the European market, but never accessed in the USA. The entry to the flavored coffee market and penetration to leading convenient stores and food chain stores in the USA, is an important step for Frutarom. Pursuant to the acquisition, a strong and qualified management team plus experienced R&D, marketing and operation personnel will join Frutarom and help to create future synergies from merging the activities.

"This is our fifth acquisition in the current year and thanks to our proven experience in concluding acquisitions and realizing the synergies, we are confident that this acquisition will also contribute to the continued rapid and profitable growth of Frutarom. We have an excellent acquisitions pipeline in both developed markets and developing countries, with special attention to Asia, Central and South America and Eastern Europe. Our strong capital structure, combined with credit lines from leading banks in the world will enable us to seek additional strategic acquisitions, aiming to multiply Frutarom's sales turnover again within the next four years."

FSI Facts: