Israel-based flavor and fragrance company Frutarom has agreed to acquire 75% stake in Russia-based Protein Technologies Ingredients (PTI Group) for a cash consideration of $50.3m.
With net assets valued at more than $40m, PTI Group is engaged in the manufacture and marketing of savory taste solutions, including flavors, seasoning compounds and functional raw materials for the food industry.
The company operates two production sites and a sales and marketing R&D center in Moscow that includes development and application labs and 25 distribution centers across Russia and neighboring countries.
PTI's trade and marketing segment which sells raw materials that are not manufactured by the company will be merged with Frutarom's Trade and Marketing activity.
The agreement includes an option to acquire the remaining stake within three years at a price reflecting an EV/EBITDA multiple of 6 - 7x based on the average EBITDA achieved over three years.
The acquisition will enable Frutarom to expand the range of savory products and its activity and market share in developing and developed countries.
The transaction, which will be financed with a bank loan, is expected to be completed in the coming days.
Frutarom president Ori Yehudai said, "The acquisition of PTI continues the implementation of the rapid growth strategy of the Frutarom Group, and its vision "to be the preferred partner for tasty and healthy success."
"The acquisition of PTI, following prior acquisitions, is another step in the establishment of Frutarom's leadership in this important area, and we plan to continue investing in the expansion of our savory business in other countries, including through acquisitions."
Image: PTI Group is engaged in the manufacture and marketing of savory taste solutions for the food industry. Photo courtesy of artur84 / FreeDigitalPhotos.net.