Frutarom Industries Ltd. has announced that it concluded the terms of an agreement for the acquisition of 75% of the share capital of the Protein Technologies Ingredients Group (PTI) for a cash consideration of $50.3 million (reflecting a company value of $67 million). PTI has net assets valued at above $40 million and no debt.
The agreement includes an option to acquire the remaining share capital within three years. The purchase agreement is in the process of signing and the company estimates that the transaction will be completed in the coming days.
PTI Group, which was established in 1996, is engaged in the development, manufacture, and marketing of savory taste solutions that include flavors, seasoning compounds, and functional raw materials for the food industry, with a special emphasis on the processed meat and convenience food industry. In addition, PTI has a trade and marketing segment which sells raw materials that are not manufactured by the company, as part of a comprehensive service to its customers. This business, which will be merged with Frutarom’s Trade and Marketing activity (not its core business) amounted to $50 million in 2012 and has similar profit margins as Frutarom’s Trade and Marketing activity.
The PTI Group operates two production sites near Moscow, a new sales and marketing R&D center in Moscow that includes development and application labs, and 25 distribution centers across Russia and neighboring countries. The company employs a staff of 500.
PTI Group’s founders currently manage the company and will remain in their respective positions in the company and as shareholders.
“This a major strategic acquisition, which bolsters Frutarom’s position as one of the world’s largest and leading flavor companies, which is positioned as a leading global manufacturer of savory taste solutions. This acquisition reinforces Frutarom’s technological capabilities and expands both the range of savory flavors and functional products offered to worldwide customers and its wide global customer base,” said Ori Yehudai, President of Frutarom.