Israeli food flavors and specialty ingredients company Frutarom Industries Ltd. (TASE: FRUT; LSE:FRUT; OTCBB:FRUTF), which has grown rapidly through a string of acquisitions, announced its first acquisition of 2018 today. Frutarom purchased 100% of the shares in Israeli company, IBR - Israeli Biotechnology Research Ltd. (IBR) for approximately $21 million. The transaction was completed upon signing and financed through bank debt.
IBR was founded in 1995. The company researches, develops, manufactures and markets innovative and proprietary natural active ingredients for the cosmetics and dietary supplements industries, mainly for cellular and skin anti-aging, skin protection from UV rays and air pollution, skin whitening and pigmentation prevention. IBR's product portfolio includes products that have won international cosmetics industry awards for scientific innovation.
IBR has R&D labs and a production facility in Yavne, and it employs about 30 people, many of them with advanced academic degrees and long-standing industry experience. The company has a broad customer base in the US, Europe and Asia, including some of the world's leading cosmetics and personal care companies. IBR has a strong pipeline of new products which were developed in recent years, some are scheduled to be launched by the end of this year and will contribute to accelerating IBR's profitable growth.
IBR's sales turnover in 2017 totaled approximately $7.4 million, and in the past four years it has exhibited an average annual growth rate of 20%, and a 40% growth this past year. Frutarom projects a continued accelerated profitable growth for IBR products, which will also be supported by the various cross selling opportunities facilitated by this acquisition.
Frutarom says that the acquisition is the continuation of the implementation of its strategy to establish its position as a leading global supplier of unique natural products, and that it will be joining Frutarom's growing activities in the fields of algae-growth and active ingredients extraction for personal care and skin protection, sold to some of the world's leading cosmetics companies.
Frutarom points out that the global active ingredients market for cosmetics was valued at $2.63 billion in 2015, and that it is projected to reach $4.45 billion by 2026.
Frutarom Group president and CEO Ori Yehudai said, "The IBR acquisition is yet another strategic acquisition of activity in Frutarom’s growing core field which will enable us to offer our customers a broader portfolio of innovative solutions, and an important step in implementing Frutarom’s strategic plan to develop worldwide business in to the growing and profitable fields of natural cosmetics. We continue to expand our portfolio of unique and natural products, already constituting 75% of our sale volume.
"This is the first acquisition we have made this year, following 12 acquisitions in 2017, and 32 acquisitions we have carried out since 2015, which have all been successfully integrated into our global activity and have been and will continue contributing to further growth in sales and improved profits and margins through maximum capitalization of the multiple synergies they bring. We have an outstanding pipeline for further strategic acquisitions of companies and activities."
Published by Globes [online], Israel business news - www.globes-online.com - on February 4, 2018
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