The sale of Enzymotec’s krill business to major krill player Aker BioMarine is part Frutarom’s merger plan the company said – noting that the business did not fit with Furtarom’s core activities.
Frutarom completed the acquisition and took full ownership of Enzymotec on January 11, 2018, when Enzymotec shares were delisted from trading on NASDAQ.
In a statement Frutarom said it is working towards implementing a full merger plan of all Enzymotec activities ‘through the rapid, efficient and comprehensive integration of both companies’ activities.’
“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,” said Ori Yehudai, president and CEO of Frutarom Group.
The company said future activity will be focused on areas which Frutarom views as its main core activities – with an emphasis on the ‘growing and profitable’ fields of infant formula, elderly clinical nutrition, dietary supplements and pharmaceuticals.
Yehudai added that Frutarom continues to look for future opportunities – noting that there is a ‘strong pipeline’ of potential deals that match the company’s existing core activities.
Enzymotec merger plan
As part of its merger plan for ‘maximum streamlining’, Frutarom said its Israeli headquarters are to be combined with Enzymotec’s headquarters at Enzymotec’s plant in Migdal Ha’Emek.
However, as part of its merger plan Frutarom said the Enzymotec krill oil business has been sold to Aker BioMarine as the unit does not match core activities. As part of the €21.6 million (US$26.4 m) deal Aker and Frutarom have established a strategic partnership which will see Aker serve Frutarom's and Enzymotec’s nutraceutical krill oil customers.
“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 Yehudai.
Frutarom noted that in its new medical foods activity (VAYA Pharma), measures are being implemented which will lead to significant cost savings. Meanwhile in the field of infant nutrition (InFat), it said the year has begun on a ‘positive note’ with new regulatory guidelines in China which provide an advantage to international manufacturers and leading local manufacturers of infant formula – many of whom are important customers.
The Israel-based company is also taking steps to building a new R&D and innovation centre, which it says will become “a global base for the development of innovative technologies for natural specialty fine ingredients for the food and health spheres.”
Yehudai added that Frutarom continues to seek out and execute acquisitions of companies and activities in its 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,” he said.
“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,”