Frutarom Has Completed The Acquisition of a Controlling Share in PTI Group Which Specializes in Unique Savory Solutions

HAIFA, Israel, November 21, 2013 /PRNewswire/ --

Frutarom Industries Ltd. ("Frutarom") (LSE: FRUT, TASE: FRUT, TASE: FRUTF.PK) today announced that it completed the acquisition of 75% of the share capital of the Protein Technologies Ingredients Group ("PTI"), for a cash consideration of US$ 50.3 million (reflecting a company value of US$67 million). PTI has net assets valued at above US$40 million and no debt.

The agreement includes an option to acquire the remaining share capital three years from today at a price reflecting an EV/EBITDA multiple of 6 - 7x based on the average EBITDA over the three years prior to the exercise. The transaction was financed with a bank loan at LIBOR + 1.1%.

PTI, which was established in 1996, is engaged in the development, manufacture and marketing of unique and innovative savory solutions (the non-sweet spectrum) that include flavors, seasoning compounds and functional raw materials for the food industry (including unique protein-based ingredients, which are manufactured using advanced technology), with a special emphasis on the processed meat and convenience food industry. PTI's sales turnover in 2012 was US$111 million.

PTI's activity is largely synergetic to Frutarom's global savory business, which grew substantially over the last few years due to the acquisition of the savory business of Nessa, Gewurzmuller and Christian Hansen, which were acquired by Frutarom in 2006, 2007 and 2009, respectively, the acquisitions of EAFI, the savory business in Rieber and FIS in 2011, the acquisition of Savory Flavors and Ethol in 2012 and the acquisition of Gendary in 2012. The acquisition of PTI will enable Frutarom to expand the range of savory products and broaden its activity and market share in developing and developed countries.

The PTI Group operates two production sites not far from Moscow and a new sales and marketing R&D center in Moscow that includes development and application labs and 25 distribution centers across Russia and neighboring countries. The company employs a staff of 500, of which 40 deal in R&D, including 17 experts in the field of food engineering, biotechnology and chemistry, with a PhD, and a staff of 200 that deal in marketing, sales and distribution. The company's founders, with extensive experience in this area, who currently manage the company with great success, will remain in their respective positions in the company and as shareholders.

Following the acquisition, Frutarom will become one of the few global manufacturers with substantial production sites in Russia and with an R&D, sales, marketing and distribution system that is one of the largest and leading in Russia and neighboring countries.

In this transaction, Eagle Russia Fund together with another financial investor have fully exited their stakes into PTI, whereas the founding shareholders have sold part of their shares. The agreement includes an option to acquire the remaining share capital held by the founding shareholders within three years.

Lincoln International Russia and CIS acted as the sell-side financial advisor to the shareholders of PTI.

Ori Yehudai, President of Frutarom: "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". This a major strategic acquisition, which bolsters Frutarom's position as one of the world's largest and leading flavor companies, which is positioned as a leading global manufacturer of savory taste solutions. This acquisition reinforces Frutarom's technological capabilities and expands both the range of savory flavors (non-sweet tastes) and functional products offered to worldwide customers and its wide global customer base.

The investment of Eagle Russia Fund dates back to October 2008, immediately after the outbreak of the financial crisis. Jan Dewijngaert, Managing Director of Eagle Venture Partners comments : "Although the economic environment at the time of our investment was difficult and uncertain, we decided to proceed with our plan to invest in PTI because of its strong market position, realistic development plans and professional management team. Also, we had built up expertise in the food sector through several successful investments and exits. Looking back to the past 5 years, we can say that we are truly pleased with the growth path achieved by PTI. We are convinced that under the guidance of Frutarom, the company will continue to expand in Russia and neigbouring markets."

About Frutarom

Frutarom is a global company operating in the global flavor and fine ingredients markets. Frutarom has significant production and development centers in three continents and it markets its products in five continents to over 13,000 customers in more than 130 countries. Frutarom's products are intended mainly for the food, beverage, flavor, fragrance, pharmaceutical, nutraceutical, health food, functional food, food additives and cosmetic industries.

Frutarom, which employs approximately 2,020 people worldwide, has 2 main activities:

- The Flavors Segment, which develops, produces and markets flavor compounds and food systems.

- The Fine Ingredients Segment, which develops, produces and markets natural flavor extracts, natural functional food ingredients, natural pharma/nutraceutical extracts, specialty essential oils, citrus products and aroma chemicals.

Frutarom's products are produced in its plants in the US, UK, Switzerland, Germany, Israel, China, South Africa and Turkey. The Company's global marketing organization includes branches in Israel, the US, UK, Switzerland, Germany, Belgium, the Netherlands, Denmark, Norway, France, Hungary, Romania, Russia, Ukraine, Kazakhstan, Belarus, Turkey, Brazil, Mexico, Costa Rica, China, Japan, Hong Kong, India ,Indonesia and South Africa. The Company also works through local agents and distributors worldwide.

For further information, visit our website: http://www.frutarom.com.

Company Contact:
Ori Yehudai, President & CEO
Frutarom Ltd.
Tel: +972-9-9603800
Email: oyehudai@frutarom.com

SOURCE Frutarom Industries Ltd




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