Frutarom buys U.S. flavor company
Sept. 13, 2011
by Jeff Gelski
HAIFA, ISRAEL — Frutarom has acquired Flavor Systems International, Inc., a Cincinnati-based company that develops, produces and markets sweet and savory flavors to the food and beverage markets. Haifa-based Frutarom will pay $35.3 million on the transaction’s closing date, which is expected to take place in a few weeks. The final price of the transaction will be determined in accordance with an agreed mechanism related to future earnings. It may range from $29.3 million to $45.3 million.
The acquisition includes a production site that will enable Frutarom to expand into market segments such as flavored coffee and shakes. Frutarom also gains access to the field of savory flavors in the United States.
Flavor Systems International had sales of $18.4 million over the 12 months ended July 31. The R.&D., sales, marketing, production and supply chain functions of Flavor Systems International will be consolidated with Frutarom’s existing organization in the United States. Also, Frutarom will pay $6.5 million for real estate assets owned by related companies.
“I am glad to announce the important acquisition of the U.S. company, Flavor Systems, which considerably expands our activities in the U.S., which is the world’s largest flavor market and supports Frutarom’s strengthening and positioning in the global market,” said Ori Yehudai, president and chief executive officer of Frutarom.