Expanding its presence in the United States, Africa and Latin America, and the crucial beverage segment, Frutarom has acquired Hagelin for $52.4 million. Hagelin's management will join Frutarom as part of the deal.
Frutarom has now completed four acquisitions in 2013, with a total sales turnover of $147 million in 2012, investing a total of $120 million. Hagelin’s sales turnover totaled $24.2 million in 2012, up 7% from 2011. The rapid pace of acquisitions has helped feed 18% sales growth in the latest quarter.
Frutarom recently announced the purchase of the full share capital of International Aroma Group, a Panamanian company, holder of the Guatemalan Aroma group. It also completed the acquisition of 75% of the share capital of the Cypriot Vantodio Holdings Ltd.
In its latest purchase, Frutarom has targeted Hagelin's salt, sugar and calorie reduction capabilities and taste-improvement technologies. (Hagelin divested its fragrance business in 2009.) The acquisition has also boosted Frutarom's competencies in soft drinks, functional drinks, alcoholic beverages and savory solutions.
Hagelin has three R&D, production and marketing sites, two of them in the United States (in New Jersey and in Georgia), and one in the United Kingdom.
“We are happy to announce the acquisition of US Hagelin, which will substantially bolster our presence in the biggest flavors market in the world and in other important developing markets, which we identified as strategic to securing our rapid growth," said Ori Yehudai, president and CEO of Frutarom. "The acquisition of this lucrative company will intensify Frutarom’s technological capabilities, especially in the growing and profitable beverage flavors sector, and adds to its R&D capabilities, sales and marketing infrastructure and cross-selling opportunities. In this acquisition, we will enjoy a significant reinforcement of excellent managers, R&D, sales and marketing personnel"
He continued, “This acquisition is yet another step in the growth of Frutarom’s profitable flavor business in the United States, a market we identified as a key strategic target. Our U.S. activity in recent years is exhibiting consistent organic growth that is at higher rates than the market’s average growth rates, and the acquisitions we made in the past few years accelerated this growth and increased our market share. We plan to continue implementing our rapid growth strategy in the U.S. market. Today we report our fourth acquisition for 2013. This follows the eight acquisitions between January 2011 and January 2012 that are reflected in our 2013 record results and have taken Frutarom several steps forward in its growth journey. We are convinced that the successful mergers in 2013 of JannDeRee in South Africa, PTI in Russia, Aroma in Guatemala and now Hagelin in the United States–will take us another step forward in our business activities and results in 2014 and the coming years. They expand our emphasis on increasing our market shares in developing, high-growth markets and in the United States as well. We will continue to implement our rapid growth strategy and to identify and carry out additional acquisitions of companies and activities that are synergistic to our own. Our solid capital structure supported by the strong cash flow we generate will allow us to continue the successful implementation of our rapid and profitable growth strategy."