Frutarom Acquires Acatris Health

HAIFA, Israel, October 3 /PRNewswire-FirstCall/ -- Frutarom Industries
Ltd. (LSE: FRUTq, TASE: FRUT, OTC: FRUTF) announced today that it signed an
agreement for the acquisition of 100% of the share capital of multinational
Acatris Health in consideration for a cash payment of Euro 10.5 million.

Acatris Health, a global health ingredients company in Belgium and the
Netherlands, is a member of the Dutch Royal Schouten Group N.V. Acatris
Health is engaged in the development, production, sale and marketing of
unique and innovative botanical ingredients for the dietary supplement and
functional food markets. Acatris Health's LifeLine product range includes
Linumlife, Fenulife, and Soylife, which are strong reputable product brands
and enjoy both licenses and patents that effectively promote and protect
the sales of these clinically-proven natural health ingredients. Acatris
Health sells its products to over 450 leading companies in the food
supplement, functional food and cosmetic markets, largely in Western Europe
and the United States.

With its staff of 38, Acatris Health has achieved sales of US$14.7
million (Euro 11.6 million) in 2005 with margins similar to that of
Frutarom's Fine Ingredients Division. Frutarom expects that Acatris
Health's activities will grow in the coming years at an above-industry rate
largely due to increased sales of its unique, branded proprietary patented
products that enjoy above average profitability.

According to Frutarom's President and CEO, Ori Yehudai, "Acquiring
Acatris Health is an important strategic acquisition that represents
another step in the implementation of Frutarom's rapid growth strategy and
the fulfillment of its vision "To be the Preferred Partner for Tasty and
Healthy Success." The acquisition of Acatris Health will significantly
strengthen our unique, natural product portfolio that we offer our
customers, particularly in the dietary supplement and functional food
markets that are enjoying rapid growth, and strengthen Frutarom's
leadership position in these markets." Yehudai added that "thanks to
Frutarom's proven experience in implementing effectively mergers and
acquisitions, and leverage of all possible cross-selling synergies, we are
convinced that this acquisition will also contribute to Frutarom's
continuing rapid growth and profitability, and will create high value for
our customers, our employees, and our shareholders"

Mr. Piest, CEO of Royal Schouten Group ("RSG"), which was represented
by JBR Corporate Finance in the sale process of Acatris Health, commented
that RSG and Acatris Health's management are pleased with the sale of
Acatris Health to Frutarom, which RSG sees as a leading global player in
the industry. "Our longstanding and special relationship with the Frutarom
Group, with whom we have cooperated for years with great success, together
with Frutarom's advantageous global position, assures that the integration
of the two companies' activities will contribute both to Acatris Health's
devoted and superb staff and customers, as well as those of Frutarom."

A high degree of synergy exists between the current activities of
Acatris Health and Frutarom, which Frutarom will work diligently to
realize. Acatris Health's activity will be merged within the global
structure of Frutarom's Fine Ingredients Division, and also be combined
with the successful activity of Flachsmann Switzerland, acquired by
Frutarom in 2003. Acatris Health's experienced and effective management,
R&D, marketing and sales teams will contribute significantly to the
Frutarom Group's existing human resources, and Frutarom's R&D community
will benefit from significant new expertise in the arena of natural
products with the addition of Acatris Health's R&D capabilities and its
pipeline of future products and applications. Acatris Health's excellent
marketing and sales organization, recognized as a leading provider of
natural products, particularly in the USA and Western Europe, and its
customers will join those of Frutarom, thereby creating new and varied
cross-selling opportunities that Frutarom will be able to offer to its
widened customer base, and Acatris Health's and Frutarom's combined sales
and marketing network will promote Acatris Health's unique products in
geographies such as Asia where they had a limited presence up until now.
Manufacturing equipment that was acquired as part of the acquisition will
be integrated into Frutarom's manufacturing facilities, and Acatris
Health's logistics center in Belgium, also acquired as part of the
transaction, will be integrated as well strengthening Frutarom's European
supply chain.

Frutarom is a global company listed on the TASE and the LSE. It engages
in the development, manufacture, and marketing of flavor extracts and fine
ingredients used in the manufacture of food, beverages, pharmaceuticals,
nutraceuticals, functional food, and cosmetics. Frutarom manufactures,
markets, and sells over 15,000 products to over 5,000 customers in more
than 100 countries.

Frutarom's 2005 sales totaled US$243.8 million (a 24% increase from
2004), and its net profits totaled US$28 million (a 50% increase from
2004). Frutarom's sales from the first half of 2006 totaled US$143.3
million, up 8.7% from the first half of 2004. Its net profits from the
first half of 2006 grew by 14.4%, totaling US$17.4 million. Frutarom's
activities are carried out in two divisions:
- Flavors Division which engages in the development, manufacture, and
sales of flavors, compounds and food systems.
- Fine Ingredients Division, which engages in the development,
manufacture, and sales of natural flavor extracts, natural functional food
ingredients, natural pharma / nutraceutical extracts, essential oils,
unique citrus products, and aroma chemicals

For more information, visit us at
Ori Yehudai, President & CEO
[email protected]

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