Frutarom Expands its Presence in the Growing Markets of India and Africa
14 May, 2015
FRUTAROM EXPANDS ITS
PRESENCE IN THE GROWING MARKETS OF INDIA AND AFRICA:
ACQUIRES CONTROLLING SHARE IN THE INDIAN FLAVORS AND
FRAGRANCES COMPANY SONAROME
SONAROME SALES IN 2014: $12M
Frutarom Industries Ltd. ("Frutarom"), one of
the world's 10 largest companies in the field of flavors and specialty fine
ingredients, continues implementing its rapid growth strategy, and announces
today that it has acquired 60% of the share capital of the flavors and
fragrances company Sonarome Private Ltd. ("Sonarome") in
exchange for a cash payment of US$ 17.2 million (reflecting a company value of
US$ 28.6 million). The purchase agreement includes an option for Frutarom to
acquire the remaining balance of shares starting two years from now at a price
conditional on the company's business performance. The transaction is being
financed using bank debt.
Sonarome, which was founded in 1981, engages in the
development, production and marketing of flavors and fragrances. Sales for Sonarome
have grown quickly in recent years at a double-digit annual rate, reaching US$
12 million in 2014. Sonarome's manufacturing, marketing, and research and
development are based in Bangalore, India where it has additional production
capacity.a In addition to its activities in India, Sonarome has extensive
activity in about 20 African markets, particularly in Nigeria, South Africa,
Ethiopia, Kenya and Mozambique, which also constitute key growing target
markets in Frutarom's growth strategy. Sonarome has a broad customer base that
includes global and local food and beverages manufacturers.
The founders of Sonarome, T.S. Gulhati and Mrs. R Gulhati, and
their son N. Gulhati, have amassed rich and fruitful experience in the
industry, and those successfully running Sonarome today will continue in their
roles with the company as management and shareholders.
Ori Yehudai, President and CEO of Frutarom Group, said:
"The acquisition of Sonarome is the continuation of the Frutarom Group's
implementation of its rapid growth strategy and realization of its vision 'to
be the preferred partner for tasty and healthy success.' Frutarom has set
itself the goal of expanding its activity in the emerging high-growth markets
of India and Africa, both through internal growth and by means of acquisitions.
The acquisition of Sonarome, one of India's leading domestic companies in the
field of flavors and fragrances, is another key step towards attaining this
goal. Combined with Sonarome's activity, Frutarom will continue to develop and
deepen its presence in the important markets of India and Africa, capitalize on
Sonarome's R&D and sales and marketing platform and integrate it with
Frutarom's global R&D and sales and marketing infrastructure in order to
leverage and realize the many cross-selling opportunities arising from this
acquisition. We will also work towards leveraging Sonarome's production and
supply chain capabilities to accelerate our growth in India.
"The acquisition of Sonarome will provide Frutarom with
the advantages of a global manufacturer having a local R&D and production
platform in cutting delivery time and improving
service to customers in the region. It will also contribute towards
accelerating the momentum of expanding activity in the growing markets of Africa
where Frutarom began independent operations four years ago, which also gained a
boost with the acquisition of JanDeRee in South Africa about two years ago. In
addition to its flavors activity, Sonarome maintains an excellent and growing
infrastructure for activity in the field of fragrances as well, particularly in
India and the emerging markets of Africa, and Frutarom will work towards
utilizing this infrastructure in penetrating additional emerging markets.
workforce following the acquisition will benefit from a substantial boost and
reinforcement by experienced and efficient managers and employees at every
level. Sonarome's outstanding, strong, and seasoned management team will
contribute to Frutarom from its rich experience and together with it will lead
towards continued and accelerated growth in India and Africa."
Yehudai summarized in saying: "Thanks to Frutarom's proven experience in
executing acquisitions and realizing the synergetic opportunities inherent in
combining the acquired activities with its own, we are certain that this
acquisition too will contribute to Frutarom's continued rapid and profitable
growth and generate top value for our customers, employees and investors.
Sonarome is our fourth acquisition this year as we continue to search out and
perform further strategic acquisitions of companies and operations in our
fields of activity, with special focus on activities and markets exhibiting
high rates of growth."
(LSE: FRUT, TASE: FRUT) is a multinational company operating in
the global flavors and fine ingredients markets. Frutarom has significant
production and development centers on four continents and markets and sells the
over 31,000 products it produces to over 16,000 customers in more than 150
countries. Frutarom’s products are intended mainly for the food and beverages,
flavor and fragrance extracts, pharmaceutical, nutraceutical, health food,
functional food, food additives and cosmetics industries.
which employs approximately 3,100 people worldwide, has 2 main core activities:
-The Flavors Activity which develops, produces and markets flavor
compounds and food systems
Specialty Fine Ingredients Activity, which develops, produces and markets
natural flavor extracts, natural functional food ingredients, natural
pharma/nutraceutical extracts, natural food colors, natural algae based
biotechnical products, natural antioxidants used in natural food protection
systems, aroma compounds, essential oils, unique citrus products, natural gums
and resins. The Specialty Fine Ingredients products are sold primarily to the
food and beverages, flavor and fragrance, pharmaceutical/nutraceutical,
cosmetics and personal care industries.
are produced at its plants in the US, UK, Switzerland, Germany, Spain, Italy,
Slovenia, Russia, Turkey, Israel, South Africa, China, Guatemala, Peru, Chile
and Brazil. The Company’s global marketing organization encompasses branches in
Israel, the US, the UK, Switzerland, Germany, Slovenia, Belgium, the
Netherlands, Denmark, France, Italy, Spain, Hungary, Romania, Russia, the
Ukraine, Poland, Kazakhstan, Belarus, Turkey, Brazil, Mexico, Guatemala, Costa
Rica, Peru, Chile, South Africa, China, Japan, Hong Kong, India and Indonesia.
The Company also works through local agents and distributors throughout the
world. For further information, please visit our website at: www.frutarom.com.