Frutarom Makes 13th Acquisition of the Year and Biggest Ever

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Israeli flavor and fine ingredients maker Frutarom Industries said Monday it had agreed to buy Austrian savory flavor maker Wiberg for 119 million euros ($130 million), its largest acquisition ever.

Frutarom, which acquired 12 companies in 2015, also raised its sales target to $2 billion by 2020 with a profit margin for earnings before interest, tax, depreciation and amortization from core activity above 22 percent. Last month it said it aimed for sales of more than $1.5 billion by 2020.

Frutarom’s shares rose 10.5% to end at 191 shekels ($49.57) in Tel Aviv Stock Exchange trading, marking close to a 44% gain for the share so far this year.

The global market for savory flavors is growing due to the rise in standards of living and changes in lifestyle and consumer habits, Frutarom said. Frutarom sees savory flavors as an important growth engine and about 10 years ago began increasing activity in the sector through acquisitions in Europe, North America, Africa and Asia.

CEO Ori Yehudai has been on a buying binge, averaging this year alone an acquisition at a slightly faster pace than one a month. Last week, his company acquired the Hong Kong-based companies Inventive Technology and Prowin International for $17 million.

Salzburg-based Wiberg’s savory products include flavor extracts, seasoning blends and functional ingredients for the food industry, with an emphasis on processed meats and convenience foods. It employs 670 people and operates five production sites.

Wiberg had sales of about 155 million euros in 2015 and adjusted Ebitda of 17 million euros. The value of Wiberg’s assets stood at 107.8 million euros at the end of 2014.

“Wiberg will also facilitate the acceleration of our penetration into the savory market in North America through its Canadian-based activity, which also has research and development labs, a factory and a sales platform on the west coast of the United States,” Yehudai said.

The transaction will be financed with bank debt. Completion of the deal is subject to approval from the German and Austrian antitrust authorities, which Frutarom expects will be granted at the beginning of 2016.

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