Specialty-ingredients supplier Innophos Holdings Inc. (Cranbury, NJ) announced earlier this week that it will acquire New Jersey–based Novel Ingredients, a supplier of botanical, protein, amino acid, and other healthy ingredients for the health and wellness market, for $125 million. Innophos, which supplies phosphate, mineral, and botanical-based ingredients, says that the merger agreement will create a nearly $0.5 billion food, health, and nutrition platform for the company, and deliver strong shareholder value. The company says that the transaction is expected to be finalized in the third quarter of 2017.
Novel Ingredients has a purported annual revenue of nearly $100 million, with a 2008-2016 compound annual growth rate (CAGR) of 19%, and has demonstrated growth in the immune health, sports nutrition, and cognitive health categories, according to a press release. The company, which offers more than 185 “unique ingredient solutions,” employs 100 people.
“Bringing Novel Ingredients and Innophos together will create a food, health, and nutrition platform of nearly $0.5 billion in revenue representing 60% of our total combined company,” said Kim Ann Mink, PhD, chairman, president, and CEO, Innophos. “The combined company will benefit from leading, innovative technology, a broader and deeper product portfolio, and access to new market segments.” Mink added that Novel Ingredients’ customer relationships, ingredient development knowledge, and quality assurance were also assets. Innophos projects that annual cost synergies stemming from the companies’ combined product technology and customer relationships are will be $4 million.
Rick Antonoff, CEO, Novel Ingredients, also expressed enthusiasm for the agreement: “We are delighted at the prospect of becoming part of Innophos,” he said. “We believe that joining the Innophos team will enable Novel Ingredients to deliver enhanced value to our existing customers, and will present exciting opportunities to expand our business into new market adjacencies. We look forward to working closely with the Innophos team to ensure a smooth transition.”
Mink also noted that the acquisition will help Innophos’s presence in “attractive nutrition end-markets, and…will more closely align Innophos with important consumer mega-trends such as health and wellness, energized aging, and clean labels.”