Naturex and Natraceutical Group Sign Merger Agreement for Ingredients

Spanish multinational Natraceutical Group, a leading biotechnology corporation in the field of research and development on functional ingredients, active principles and nutritional supplements, and French multinational Naturex, a leading supplier of natural speciality ingredients to food, flavour, food supplements, pharmaceutical and cosmetic industries, formalized yesterday the binding contracts for the merger of their ingredient activities.

The transaction will be structured by means of the integration of Natraceutical’s Ingredients Division into Naturex. This merger, triggered by two of the leading publicly traded companies in the ingredients industry, will create the number one independent company of natural specialty ingredients in the world.

With a fully complementary product portfolio that includes nutraceutical ingredients, flavouring, preservative and innovative extracts on Naturex’s side, and natural colours, fruit and vegetable powders, pectins, functional ingredients, yeasts and caffeine by Natraceutical’s ingredients division, the new company will have a balanced geographical presence between Europe (50% of the combined proforma turnover) and the USA (34%).

Once the merge will be completed, Naturex will have production sites in Europe (France, Italy, Spain, Switzerland and the United Kingdom), the USA, Morocco, Australia and Brazil and own sales offices in the USA, Europe and Asia, thus being ideally placed to take advantage of the ongoing growth and consolidation of this sector.

Naturex proforma sales after the merge are expected to reach in 2009 around € 185 million and proforma EBITDA will represent around € 28 million, with a debt ratio not higher than 3.5 times EBITDA.

Natraceutical is to hold a stake of 39% in Naturex, by means of a capital increase in kind, and become board member, alongside SGD, the family-controlled holding company of Jacques Dikansky, Naturex’s chairman and CEO, who will remain the reference shareholder in terms of voting rights. The transaction also comprises € 38 million for Natraceutical, debt or cash, € 10 million of which will not be made effective until the confirmation of both companies’ year-end results.

The company will operate under Naturex management, headed by Jacques Dikansky, chairman and CEO of the company.

After the completion of the transaction, and from an operational point of view, Natraceutical Group will focus their efforts in the full development of their nutritional supplements division in Europe, which the company markets exclusively in pharmacies under the brand name Forté Pharma.

Naturex and Natraceutical Group have scheduled a public presentation of this transaction on October 15th at 10.00 am, at Madrid Stock Exchange premises, where the chairmen of the two companies will also comment on the plans for the future of their respective businesses.

About Naturex
Naturex has a recognized place amongst the very top global leaders in natural extracts. Naturex manufactures and markets natural ingredients for the food, nutraceutical, pharmaceutical and cosmetic industries.

These products are exclusively sold to industrial companies. Today’s market for extracts is very strong since the natural origin of ingredients fulfils a buoyant and fast-growing demand from end consumers. Naturex's strength lies in its ability to position itself on specific products which constitute market niches.

During the past ten years, Naturex has recorded a very strong growth. Revenues have been multiplied by ten during this period. To maintain the healthy organic growth of the group and to fully exploit the expertise in offering high value-added, high performance technical solutions for each of our different markets, Naturex has structured its activities, since 2009, into three core businesses: Food & Beverage, Nutrition & Heath and Personal Care.

Based in Avignon, the group employs 600 staff and over 90% of its sales are overseas. Naturex has production units in France, Morocco, the United States and Italy, as well as 8 sales offices located in Europe, the USA and Asia.

Naturex quotes on NYSE Euronext Paris under the ticker FR0000054694; NRX. Total outstanding shares: 3,882,040. After the capital increase to integrate Natraceutical’s assets: 6,364,000.

About Natraceutical Group
Spanish multinational corporation Natraceutical Group is at the forefront of biotechnology applied to nutrition, a leading reference in the research and development of naturally-sourced functional / active ingredients and nutritional complements for the foodstuffs, pharmaceutical and cosmetics sectors. The company streamlines its industrial activity through two divisions (Ingredients and Nutritional Supplements) with the purpose of contributing to the prevention of diseases and improving quality of life through nutrition.

The Group’s Ingredients division currently runs production facilities in Spain, UK, Switzerland, Australia and Brazil; and operates actively in over 60 countries, running branches in Europe, US and the Asia Pacific region, plus several sales networks worldwide. Natraceutical provides products and services to over 1,000 companies worldwide, including eight of the world’s ten leading food corporations.

In October 2006, Natraceutical expanded its sphere of activity by penetrating the nutritional supplements sector following the acquisition of Monaco-based company Laboratoires Forté Pharma, specializing in nutritional supplements for health, beauty and weight control, thanks to which the company gained direct access to end consumers.

Natraceutical quotes in the Spanish stock exchange under the ticker NATE.MC. Total outstanding shares: 328,713,946.

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