Frutarom takes full ownership of Enzymotec, sells krill oil business to Aker BioMarine
19 Jan 2018 --- Frutarom Industries has completed its acquisition of full ownership of Enzymotec. Upon completion of the transaction on January 11, 2018, Enzymotec shares were delisted from trading on NASDAQ and it ceased to be a public company. Frutarom reports that it is working towards implementing the full merger plan of all Enzymotec activities through the rapid, efficient and comprehensive integration of both companies’ activities in the areas of management, R&D, sales and marketing, production and supply chain. As part of its merger plan, Frutarom has announced the sale of Enzymotec’s krill oil business to Aker BioMarine.
Frutarom reports that, in the framework of the merger and maximum streamlining, its Israeli headquarters are to be combined with Enzymotec’s headquarters at Enzymotec’s plant in Migdal Ha’Emek.
Enzymotec activity will be focused on areas which Frutarom views as its main core activities, with emphasis on the growing and profitable fields of infant formula, elderly clinical nutrition, dietary supplements and pharmaceuticals, and will work towards accelerating growth in these fields which have significant business potential.
As part of these measures, Frutarom has announced the sale of Enzymotec’s krill oil business, which is not a core activity of Frutarom, to Aker BioMarine for approx. US$26.4 million. Aker BioMarine and Frutarom have established a strategic partnership in which Aker BioMarine will serve Frutarom's and Enzymotec’s nutraceutical krill oil customers.
“We are working towards focusing Enzymotec on the growing and profitable fields which we view as its core activities, accelerating the profitable growth of Frutarom’s and Enzymotec’s joint activities and on fully exploiting the significant cross-selling opportunities inherent in the acquisition, expanding Enzymotec’s business into additional countries and to many other Frutarom customers and expanding the product portfolio to the existing customer base of both companies,” notes Ori Yehudai, President and CEO of Frutarom Group.
In the medical foods activity (VAYA Pharma), measures are being implemented which will lead to significant cost savings, along with the addition of specialty Frutarom products to VAYA Pharma’s sales network in the United States, which will contribute to the acceleration of this activity’s growth. At the same time, Frutarom continues to explore strategic alternatives for this activity.
In the field of infant nutrition (InFat), the year has begun on a positive note with the support of new regulatory guidelines taking effect in China which provide an advantage to international manufacturers and to leading local manufacturers of infant formula, many of whom are important customers for this activity. The global market for infant formula has almost tripled since 2006 and currently has a retail value of over US$40 billion, with China accounting for a large percentage of its retail value.
Frutarom has also begun taking steps towards building a new R&D and innovation center at Enzymotec which will become a global base for the development of innovative technologies for natural specialty fine ingredients for the food and health spheres, while combining and making maximum use of Enzymotec’s R&D infrastructure.
“We are pleased to have completed the strategic acquisition of Enzymotec and are certain that joining Frutarom and Enzymotec brings about major and immediate growth opportunities to Enzymotec’s innovative product portfolio with the support of Frutarom’s global capabilities, and thereby creating significant value,” Yehudai says.
“Upon completion of the transaction, we have begun carrying out plans for fully merging Enzymotec activities with Frutarom to enable the rapid, efficient and comprehensive integration of the global activities of both companies in the areas of management, R&D, sales and marketing, production and supply chain, along with streamlining, significant cost savings and optimum utilization of Enzymotec’s modern plant in which approx. US$40 million has been invested, and the pipeline of new products developed at an investment of approx. US$30 million in Enzymotec’s R&D labs over recent years,” said Mr. Yehudai.
“We are working on seeking out and executing additional acquisitions of companies and activities in our fields of activity, with special focus on high-growth markets and natural products in the field of taste and health, and we have a strong pipeline of potential strategic acquisitions. We will continue carrying out our rapid profitable growth strategy, which is based on profitable internal growth and strategic acquisitions, in order to achieve the targets we recently set: sales of at least US$2.25 billion with an EBITDA margin of 23 percent in our core activities by the year 2020,” Mr. Yehudai concludes.
