Frutarom has signed an agreement for the purchase of 60% of Thai flavours company Mighty for THB 393 million ($11.9m).
The deal marks Frutarom’s eighth acquisition of 2017 so far and sees it strengthen its position in the emerging Southeast Asian market.
The company will initially acquire 49% of Mighty and, subject to a number of conditions and regulatory approvals in Thailand, it will raise its holdings to 60%. The first part of the transaction will be completed in the upcoming weeks and Frutarom estimates that the full deal will be completed in the coming months.
Mighty’s sales turnover in the 12 months ended August 2017 totalled around THB 500 million ($15.1m), having registered average annual growth of 12% over the past four years.
The Thai company was founded in 1989 and engages in the development, production and marketing of flavours. Its portfolio of solutions includes seasoning blends and marinades as well as speciality functional raw materials for the food and beverage industry with emphasis on convenience foods, snacks, noodles, fish, meats, baked goods, beverages and dairy.
Frutarom said that Mighty has a line of ‘unique products and solutions that are adapted to Asian tastes’. Its activity also includes solutions for producing raw materials for the fields of infant nutrition and elderly nutrition, which Frutarom intends to continue developing.
The acquisition will contribute towards strengthening our position in Thailand while attaining a significant comparative advantage of proven innovative R&D capabilities
Approximately 60% of Mighty’s activity consists of manufacturing taste solutions, while 40% is trade activity is in speciality raw materials for the food, beverages and nutrition industries. It has approximately 180 employees at two production sites.
Around 70% of its activity is in Thailand and the rest is in Asian countries such as Indonesia, Malaysia, Singapore, Vietnam, Bangladesh and India.
Ori Yehudai, CEO of Frutarom, said: “The acquisition of the Thai flavors company Mighty is an additional acquisition of activity in Frutarom’s core field which strengthens our global market leadership in the field of savoury along with deepening our activity in the important growing region of Southeast Asia and continues Frutarom’s implementation of its rapid and profitable growth strategy and realisation of its vision to be the preferred partner for tasty and healthy success.
“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.”
In August, Yehudai told FoodBev that the company has a shortlist of 200 acquisition targets that form part of aggressive expansion plans.
He said that in order to reach the company’s target of $2 billion in sales by 2020, it will continue carrying out this growth strategy.
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