Frutarom agrees to acquire stake in Grupo Piasa

Flavouring manufacturer Frutarom has agreed to purchase 75% of the shares of Mexico-based Grupo Piasa for Mex$405m (approximately $20.5m).

As part of the deal, Frutarom will also acquire the real estate accomodating Piasa’s main production site in Monterrey, Mexico, and will serve as its headquarters.

Frutarom Group president and CEO Ori Yehudai said: “The acquisition of Piasa is the continuation of the implementation of Frutarom Group's rapid profitable growth strategy and the realisation of its vision 'to be the preferred partner for tasty and healthy success.

“This is an important strategic acquisition that provides Frutarom significant entry into the Mexican market, one of Latin America’s main markets and among the most important and fastest growing in the world.

“Piasa is a leader in Mexico’s savoury solutions market and we intend to continue expanding its activity with the support of Frutarom’s global infrastructures and based on Piasa’s quality production infrastructure with its excess capacity, as well as through exploiting cross-selling opportunities by offering Frutarom’s broad portfolio of solutions to Piasa’s Mexican customers and gaining new customers in the local market, along with expanding Piasa’s activity to those countries in the region where Frutarom already has a sales and marketing infrastructure in place.”

The purchase agreement also includes a mechanism for future consideration based on Piasa’s future business performance, and an option for the purchase of the balance of shares beginning five years after completion of the transaction.

Both companies anticipate that the transaction is expected to be completed within the next several weeks and will be funded through bank debt.

Frutarom anticipates rapid growth in the field of savoury flavours in which it now holds a leading market position.

The acquisition of Piasa would enable the company to expand its activity and market share in Latin America, as well as reinforce its supply of products in the savoury field.

It is the first acquisition of Frutarom in the Mexican market and fifth in the Latin American market in the last four years.