Frutarom announces takeover of flavour firm Aroma

Frutarom has announced the takeover of Guatemalan flavour company Aroma in a $12.5m deal, as it continues to implement a rapid growth strategy with an emphasis on emerging markets.

Established in 1990, Aroma is engaged in the development, manufacture and marketing of flavours primarily for beverages, dairy products, confectionery, snacks and convenience food.

The company caters to manufacturers in Guatemala, Honduras, Costa Rica, El Salvador and other markets, primarily in Central America.

It has a staff of 57 people and a production, development and marketing site in Guatemala city.

The deal allows Frutarom to reinforce its presence and increase its market share in the Central and South American markets, while expanding its product range and enhancing its R&D, sales and marketing capabilities.

It includes a mechanism of future consideration under which additional consideration will be paid in the amount of any excess EBITDA above $2.25m during the 2013 to 2015 period.

As part of the takeover, Frutarom is acquiring Aroma’s facility in Guatemala.

Together with Frutarom’s management, Aroma’s owner and CEO will continue to manage the company’s business in the next few years.

Frutarom plans to merge the acquired entity with its operations in Costa Rica, which will constitute a development and production centre for the region’s countries.

Frutarom president and CEO Ori Yehudai said, "We consider the acquisition of Aroma as another strategic step to increase Frutarom’s market share in high growth markets in general and particularly in Central America, which Frutarom has identified as attractive markets that will contribute to future development."

"Frutarom intends to take advantage and integrate Aroma’s production, R&D, sales and marketing infrastructure with Frutarom’s global R&D, sales and marketing infrastructures in order to leverage and exploit the cross-selling opportunities generated by this acquisition," Yehudai added.

Yehudai concluded, "This acquisition will provide Frutarom with the advantages of a global player with local capabilities and allow cost savings through the transfer of production to the efficient Guatemalan plant, while reducing supply lead times and improving customer service."

Last week, Frutarom acquired a 75% stake in Russian ingredients firm Protein Technologies Ingredients (PTI) in a $50.3m all-cash deal.

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Image: The acquisition allows Frutarom to reinforce its presence and increase its market share in the Central and South American markets. Photo courtesy of artur84 at FreeDigitalPhotos.net.