IFF confirmed that it completed the acquisition of the business operations from privately held Aromor, which specializes in complex specialty ingredients that are used in a cross-section of fragrances.
Although the price of the transaction was not revealed, it is estimated that the business operations have an approximate turnover of $35 million a year, which is expected to be added to the IFF results on a proforma basis.
The newly acquired operations will be incorporated into the IFF Fragrances Ingredients business and will be accretive to IFF’s earnings per share in 2014.
A strategic opportunity for IFF to expand its fragrance business
In a press statement, IFF CEO Doug Tough said that the acquisition represented a strategic opportunity, giving it stronger R&D capabilities, as well as adding further cost-effective ingredients solutions to its existing portfolio, particularly for specialty molecules.
“We believe the use of the Aromor ingredients portfolio and their technology development process will be value enhancing by improving the overall profitability and win rate of our fragrance creations,” said Nicolas Mirzayantz, ITT group pesident Fragrances.
“We plan to continue to support the Aromor facility in Israel and invest in and develop their R&D and manufacturing capabilities in order to strengthen the development and production of specialty ingredients.”
Aromor is an existing supplier to IFF and the two companies have been working together, so integration of the new business is expected to be relatively straight forward.
Looking to the future, Aromor CEO and president Cohen Khazon believes the acquisition will help grow and develop the existing business: “Our R&D expertise, combined with IFF, will enable increased new product development and technology advances,” he said.
Fragrance drives strong IFF results
In IFF last financial quarter quarter local currency sales increased by 4% to $742.3m, compared to the corresponding period last year, which was underpinned by the fact that reported sales increased by 5%.
On a geographical basis, the company revealed that the main driving force behind the increase was an 8% hike in revenues from its emerging market.
Net income for the period rose significantly, from $16.3m last year, to a figure of $99.04m for the current quarter, a figure that excluded a $72.4m charge related to a Spanish tax settlement from the previous financial year.
The growth was mainly driven by the fragrance division, where sales were up by 7% on a reported basis and 5% in local currencies to $392.9m, compared to $468.3m in the corresponding period last year.