Frutarom to acquire Flavor Specialties, Inc.
March 04, 2009
by Keith Nunes
HAIFA, ISREAL — Frutarom Industries Ltd. has entered into an agreement to acquire Flavor Specialties, Inc., Corona, Calif. Flavor Specialties is a flavor and botanical extract company that develops, produces and markets products primarily for the food and beverage industry.
The acquisition agreement includes a cash payment of $17.2 million plus an "earn-out" mechanism based on the average EBITDA generated by Flavor Specialties during the 24 months ended Dec. 31, 2010, and multiplied by 5.5. Based on the formula, the acquisition price may rise to as much as $27 million or decline to $3.15 million.
During 2008, Flavor Specialties’ sales totaled approximately $11.5 million.
Ori Yehudai, president and chief executive officer of Frutarom, said the acquisition is intended to strengthen his company’s presence in North America.
"Frutarom intends to take advantage of our global marketing and sales infrastructure to leverage and realize the many cross selling opportunities created by this acquisition by broadening both the customer base and the product portfolio," he said.