January 15, 2020

By Lynda Kiernan

Ambienta, the largest sustainability-focused private equity investor in Europe, announced the acquisition of Nactis Flavours, a leading producer and distributor of aromatic raw materials, ingredients, and flavours for the food and beverage industries. 

Headquartered in Bondoufle, France, Nactis Flavours makes flavours, colours, blends, ingredient solutions, and extracted raw materials for the food industry through its five plants across France and Belgium. With a roster of 2,500 clients ranging from some of the leading international players in the food and beverage space to small artisanal buyers, Nactis generated more than EUR50 million (US$56 million) across 80 countries in 2019.

Nactis will be joined into Ambeinta’s flavours and ingredients platform created as a buy-to-build project with the target of becoming a leading provider of healthy food ingredients to small and mid-sized food companies across Europe.  The platform, previously called AromataGroup, consisted of Aromata, a leading key supplier of natural flavours and colours for the food industry acquired in 2018, and IPAM, an Italian producer of breading and battering solutions and functional ingredients for the food industry with a focus on the ready-meal market with a line of marinades, fillings, and flavourings.

This combined company boasts five production facilities across Italy, and 1,500 customers across Europe. Now, with the addition of Nactis to the group, the platform will undergo a name change, and will now be called Nactarome to reflect a new ambitious project with a unique, strategic product offering across natural flavours, colours, and ingredients that will address all end-markets and applications. 

“We are very excited to join forces with AromataGroup and IPAM under the new holding Nactarome: a new, ambitious project, in which Nactis and its staff look forward to important future growth and professional development,” said Hervé Lecesne, founder of Nactis Flavours and president of Nactarome.

“Acquisitions such as Nactis are key for our project,” said Maruo Roversi, partner and CIO, Ambienta. “We are very excited to partner with the group’s management team and founders, who see in joining forces with Nactarome the opportunity to be part of a fast growing player, expand into new products and markets, and strengthen their sustainable offering.” 

A Seismic Shift

A seismic shift by consumers toward more natural and transparent food ingredients and away from processed and synthetic options is driving strong growth in the natural ingredient category, with global growth expectations of 7 percent, according to Ambienta. 

Together with pressure on the industry also coming from global commodities giants vying to reposition themselves beyond commodities, and up the production chain to gain a foothold in higher margin businesses, there has been a feeding frenzy by both industry players and private equity with a frenetic rate of M&A activity in recent years.

One of the first and largest deals in the category occurred in 2014 when U.S.-based Archer Daniels Midland (ADM) beat a field of rival bidders to acquire Wild Flavors – which produces flavourings for cereals, ice cream, dairy, and confectionary items – for $3.1 billion from the U.S.-based private equity firm Kohlberg Kravis Roberts and Dr. Hans-Peter Wild.

Over the two years after it acquired WILD Flavors & Specialty Ingredients for US$2.92 billion, ADM created a new Wild Flavors & Specialty Ingredients business unit, which includes the ADM specialty proteins line, emulsifiers, edible beans, natural health and nutrition, soluble fibers, polyols, hydrocolloids, along with the Wild Flavors business. By 2018 the company  extended its reach both in Brazil and in the ingredients segment with the full acquisition of the country’s top producer of natural extracts, emulsions, and compounds, Amazon Flavors.

In 2018 alone we saw Givaudan acquire and delist Naturex, a leader in the development of natural ingredients and solutions for the food and beverage, health, and beauty sectors, and International Flavors & Fragrances acquire Frutarom Industries in a massive $7.1 billion deal. 

In 2016 VMG Partners partnered with TarraVia for the development of algae-based food and ingredients, and that same year, Highland Partners acquired speciality ingredient supplier Fuerst Day Lawson. The following year, Goldman Sachs invested $30 million for a minority stake in bakery products ingredient maker Sun-in; Paine Schwartz made an undisclosed investment in Lyons Magnus Inc.; and  Ginkgo Bioworks-based Motif raised $27.5 million in August for the development of animal-free ingredients. 

Within this vertical, Nactarome will have an international footprint and full control of its production process to be able to better address the needs of its 4,000 clients promptly on a bespoke basis, while also leveraging its cross-selling abilities across multiple applications.

“My Italian colleagues and myself are impressed by the skills and competence of the Nactis team: together, we will create an innovative player to delight existing and new customers in the European food and beverage industry,” said Dr. Hans Udo Wenzel, founder of AromataGroup and executive chairman of Nactarome.

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.