The acquisition will see Israel-based Frutarom significantly expand its customer base and market share in the emerging Eastern European market whilst strengthening its capacity for the production of natural flavours.
Frutarom CEO, Ori Yehudai said the deal is an “important and strategic acquisition, which significantly expands Frutarom’s operations in Central- and Eastern Europe and strengthens its presence and market share in these fast growing markets.”
“Etol’s proven abilities and many years of experience in the flavors market, with its specialisation in natural products in beverage bases, are a strategic asset for Frutarom,” he added.
Before the Frutarom takeover, Etol had reported strong growth, with sales turnover increasing by 46% between 2006 and 2010.
The company employs 240 staff, and sells its products to a wide ranging customer base in over 47 countries including emerging markets in Russia, the Ukraine, Slovenia, Serbia, and Belarus.
The company also supplies its natural flavour products to industry in the UK, Switzerland and Germany.
Yehudai added that Etol have a ‘very good’ production site in Skofja Vas, Slovenia, that has received heavy in recent years. He noted that the site used innovative technologies in the area of flavours.
The deal for the Slovenian flavour firm is takes the count of Frutarom acquisitions since the start of 2011 to eight – with recently completed deals for UK-based snack company Savoury Flavours and Brazilian flavour house Mylner.
“We have made eight successful strategic acquisitions since the beginning of 2011, and the scope of the revenues of these acquisitions, based on 2010 financial data, is US$145 million,” said Yehudai.
“The acquisitions are in advanced stages of integration, and support Frutarom’s expanding global reach, while deepening our presence in emerging markets where growth rates are higher than the global average,” he added.
The Etol deal comes to completion after Frutarom initially acquired 56% of the firm in January. This amount rose to just over 63% in February, before the Israeli firm pulled off a deal for an additional 34% of the company’s share capital – taking the total shares owned by Frutarom to just under 98%.
Over the next few weeks Frutarom will act to delist Etol from the Slovenian Stock Exchange and to acquire the balance of shares in Etol from the remaining shareholders.
Yehudai said that Frutarom planned to integrate many more of its acquisitions over the coming months, creating “efficiencies arising from the integration.”