Frutarom (Haifa District, Israel), one of the world’s 10 largest flavor and natural specialty ingredient companies, has signed an agreement to acquire full ownership of Enzymotec Ltd. (Migdal HaEmeq, Israel), at a net investment of approximately $210 million, rendering Enzymotec a subsidiary of Frutarom. Both companies are based in Israel.
Founded in 1998, Enzymotec develops, produces and markets nutritional ingredients and medical foods produced via a proprietary technology that enables the extraction of lipids from natural sources; the separation and analysis of lipid molecules; and the subsequent enzymatic synthesis of nutritionally important lipids. The company’s sales in the 12 months ended June 2017 were $47 million, with nutrition-segment sales of $36.5 million and adjusted EBITDA of $15.7 million.
The merger will integrate the two companies’ R&D, sales, marketing, production, supply chain, and logistics activities while allowing the merged companies to expand their collective product portfolios to reach both Enzymotec’s and Frutarom’s existing customer bases.
“We are delighted at having signed a definitive agreement for the acquisition of Enzymotec and its merger with Frutarom,” says Ori Yehudai, president and CEO of Frutarom Group, in a press statement. “This amicable transaction offers significant advantages to both parties, including a further boost in value for our shareholders along with providing a quick and efficient implementation of a growth strategy and profitability for Enzymotec’s operations as well as a rapid and effective realization of the significant synergies between the companies.”
In particular, Frutarom sees Enzymotec’s nutrition segment as playing an important role in broadening the former’s catalogue of ingredients for use in pharmaceuticals, dietary supplements, designated foods for infants in the field of infant formula—where Frutarom’s current presence is minimal—and elderly clinical nutrition, in which it’s already active.
“We look forward to welcoming Enzymotec’s excellent and experienced management team and employees to the Frutarom family,” Yehudai notes, “and we are convinced they will provide significant reinforcement to the ranks of our management, R&D, and sales and marketing, production, and supply chain.”
For Enzymotec’s part, Chairman Steve Dubin notes, “We are pleased that we have reached an amicable agreement with Frutarom in a manner that benefits our shareholders. We believe that our customers will also benefit from the merger through Frutarom’s global presence and our employees will have the opportunity to thrive under Frutarom’s leadership as one of the world’s top companies in its field.”