Flavors and fine ingredients company Frutarom Industries Ltd. has acquired Montana Food, the flavors and natural food colors division of Peruvian company Montana SA, for $28.5 million in cash and the assumption of $6.5 million debt.
The acquisition includes Montana Food’s operations in Chile. Montana Food has assets worth $24.8 million and sales by Montana’s Flavors and Natural Colors Division amounted to $52.5 million in 2013. The purchase agreement includes a mechanism for future consideration conditional on improvement over current gross profit of the acquired operations during the 18 month period after the deal’s closing. The purchase agreements will be signed within the next few days and the entire transaction will be concluded within the coming weeks. The transaction will be financed by bank debt.
Frutarom Group CEO and President Ori Yehudai said, “The acquisition of Montana Food is the continuation of the implementation of Frutarom Group’s rapid growth strategy and towards realizing its vision ‘To be the Preferred Partner for Tasty and Healthy Success.’ This is an important and significant strategic acquisition, which establishes Frutarom as one the world’s top flavor companies.”
He added, “We view the Montana Food acquisition with its substantial activity in Peru and Chile, where Frutarom hasn’t been active until now in the field of flavors, as another strategic step that expands our activities in the emerging markets altogether and the growing markets of South America in particular. The acquisition strengthens our presence and market share in markets with high growth potential which Frutarom has identified as attractive markets for its continued development.”