Food flavors and ingredients company Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; OTCBB:FRUTF) continues to its acquisition blitz, and today announced its largest acquisition in 2017 so far. The company has bought 80% of the shares in Brazilian company SDFLC Brasil Indústria E Comércio (SDFLC) for 110 Brazilian reals (about $33 million).
SDFLC produces sweet flavor solutions for ice creams and desserts in Brazil. The consideration to be paid by Frutarom is after adjustments for debt and working capital, and includes future payments to be based on the performance of the acquired company.
The purchase agreement includes an option to buy the remaining shares in SDLFC starting from two and a half years from the closing of the current deal, at a price based on SDFLC's performance over the period. The deal was closed at the time of signing and was financed by bank debt.
SDFLC's revenue in the twelve months to May 2017 was 72 million reals (about $22 million). In revenue terms, the company has grown by an average annual rate of 17% over the past five years. It employs some 90 people and serves about 2,250 customers in Brazil.
Frutarom says that SDFLC's business is highly synergistic with its own flavor solutions activity. The acquisition enables Frutarom to continue to expand its global business in sweet flavors based on natural ingredients, and specifically to broaden and deepen its activity and market share in Brazil and Latin America. SDFLC's founders and managers will continue to run the company as well as being shareholders in the company.
Frutarom's share price is currently up 1.31% on the Tel Aviv Stock Exchange.
Published by Globes [online], Israel business news - www.globes-online.com - on June 25, 2017
© Copyright of Globes Publisher Itonut (1983) Ltd. 2017