Israeli flavours and speciality fine ingredients maker Frutarom Industries has signed an agreement to acquire a 60% stake in a Thai company, The Mighty, for approximately THB393m ($12m) and at a valuation of THB655m ($20m).

The deal includes the activities of Maharaj Food and Mighty International.

Frutarom will initially acquire a 49% stake in Mighty and, after obtaining approvals from Thai regulatory authorities, the company plans to increase its holdings to 60% in the company.

The deal also has the provision to acquire the remaining stake in the company in two stages in periods beginning three years and five years from the date of completion of the transaction.

The company intends to transform Mighty into a centre for R&D and production for the countries of the entire region, as well as accelerate Mighty’s activity in the field of sweet flavours.

“The acquisition will contribute towards strengthening our position in Thailand while attaining a significant comparative advantage of proven innovative R&D capabilities.”

Frutarom Group president and CEO Ori Yehudai said: “The acquisition will contribute towards strengthening our position in Thailand while attaining a significant comparative advantage of proven innovative R&D capabilities and an advanced local sales and production centre in one of Southeast Asia’s most important and fastest growing markets.

“We continue to view Southeast Asia as an important region in our map of future growth and are examining further transactions in the region that will allow accelerated growth in our core activities.”

The acquisition of Mighty is reported to be the second for Frutarom this year in Southeast Asia and is reported to be in line with its expanding activity in the region.

Established in 1989, Mighty has been engaged in the production of and marketing of flavours, including savoury taste solutions.

Its products offerings include flavours, seasoning blends and marinades as well as speciality functional raw materials for the food and beverage industry.