November 27, 2015

Frutarom, one of the world’s top ten flavor and fine ingredient companies which has been aggressively pursuing a string of acquisitions this year, has announced its 11^th purchase of the year. The company has paid US$20.7 million for a 75% stake in the Polish savory flavor developer, producer, and marketer, AMCO. Under the terms of the agreement, Frutarom also has the option to purchase the remaining outstanding balance of shares in the company after a period of two and half years after the closing date at a price to be determined by the company’s performance.

Founded in 1998, AMCO produces marinades, seasoning blends, and functional ingredients for the food industry, and has a state-of-the-art production facility located in Warsaw, Poland. For the year ending September 2015, the company reported sales total US$19.5 million.

Driven by an improvement in global standards of living and the shifts in consumer demands and tastes that this improvement brings, the global market for savory flavorings has been growing. Noting this trend, Frutarom began expanding its presence in the segment in 2006 with the acquisition of the savory flavors business of Nesse Group. Since that time, Frutarom has grown to become a leader in the European flavors industry through a string of strategic acquisitions between 2006 and today.

The acquisition of AMCO will enable Frutarom to strengthen and expand its market share in Poland and in neighboring countries. With 38 million people, a growth rate of approximately 4%, and a future projected growth rate exceeding those of other European countries at between 4% and 5%, Poland is considered to be a promising European market.

“This is a key strategic acquisition that solidifies Frutarom's position as one of the world's top companies for flavors, and reinforces its presence and standing as a leading global producer of natural, healthy and innovative savory solutions,” said Ori Yehudai, president and CEO of Frutarom in a company release. “The acquisition constitutes a significant entry into the important and expanding Polish market where Frutarom is gaining a modern state-of-the-art production site. As a global manufacturer, this acquisition provides Frutarom the advantages of possessing a local R&D and production platform for shortening delivery times and improving customer service in the region. In the future, AMCO's R&D labs and modern state-of-the-art plant will also help boost Frutarom's activity in Poland in the field of sweet flavors.”

Mr. Yehudai goes on to explain in the release that Frutarom will continue its plan of strategic acquisitions, with particular focus on operations in markets that are showing strong growth trends as the company works toward meeting its goal of sales of US$1.5 billion and an earnings before interest, tax, depreciation, and amortization (ebitda) margin exceeding 22% from its core business by 2020.