Frutarom agrees to acquire 75% of share capital of Polish savoury flavour firm AMCO

Frutarom Industries has signed an agreement to acquire 75% of the share capital of AMCO, a Polish savoury flavour solutions firm, for $20.7m, making this the Israeli flavours company’s eleventh acquisition in 2015 as it charts a strategy of global expansion.

The agreement also includes an option for buying the remaining balance of shares, beginning two and a half years from the closing date of the deal at a price based on the company’s performance.

Frutarom will take out a bank loan to make the transaction, which will be closed in the next few weeks.

Established in 1998, AMCO has an R&D, and sales and marketing centre, besides a production facility in Warsaw, Poland.

AMCO has an employee count of 70, of which 12 are involved in R&D.

AMCO develops, produces and markets savoury flavour solutions, which include seasoning blends, marinades, and functional ingredients for the food industry.

In the 12-month period ending September 2015, AMCO’s sales touched $19.5m.

The global market for savoury flavours is increasing due to growing demand for processed and convenience foods.

Frutarom has been expanding in the savoury flavours market since 2006. It acquired the savoury units of the Nesse group in 2006, Gewurzmueller in 2007, Christian Hansen in 2009, EAFI and the savoury unit of Rieber and of FSI in 2011, Savoury Flavours in 2012, a 75% stake in the Russian company PTI in 2013, and FoodBlenders in the UK and BSA in Canada in 2015.

AMCO will complement Frutarom’s global savoury activity and will enable the latter to reinforce its supply of products in the field of savoury, and expand and grow its market share in Poland and neighboring countries.

Following the acquisition, AMCO founders will continue to operate in their managerial roles within the company, and as shareholders.

Frutarom Group president and CEO Ori Yehudai said: "This is a key strategic acquisition that solidifies Frutarom’s position as one of the world’s top companies for flavours, and reinforces its presence and standing as a leading global producer of natural, healthy and innovative savoury solutions.

"The acquisition constitutes a significant entry into the important and expanding Polish market, where Frutarom is gaining a modern state-of-the-art production site. As a global manufacturer, this acquisition provides Frutarom the advantages of possessing a local R&D and production platform for shortening delivery times and improving customer service in the region. In the future, AMCO’s R&D labs and modern state-of-the-art plant will also help boost Frutarom’s activity in Poland in the field of sweet flavours."

Frutarom has an employee count of 3,500 people spread across its global operations, and is involved into two primary activities; namely the flavours activity which develops, produces and markets flavour compounds and food systems; and the specialty fine ingredients activity, which develops, produces and markets natural flavour extracts, natural functional food ingredients.