21 Jan 2019 --- International Flavors & Fragrances Inc. (IFF) has announced that its Frutarom Division has completed the acquisition of 60 percent of the share capital of The Mighty Co. Ltd. (Mighty), a Thai savory solutions provider, continuing its growth in Southeast Asia.
As reported in October 2017, the acquisition includes the activity of Maharaj Food Co. Ltd. and Mighty International Co. Ltd. for approximately THB 393 million (approx. US$12 million) and at a valuation of THB 655 million (approx. US$20 million).
“The completion of this deal with Mighty underscores that the Frutarom division will continue on its growth strategy and pursue attractive companies that create new opportunities or build on current capabilities,” says Amos Anatot, President of IFF’s Frutarom Division. “In this case, we are helping to grow our capabilities in savory solutions – already an area of strength for legacy Frutarom, now IFF.”
Mighty, founded in 1989, develops, produces and markets reaction flavors, with particular expertise in savory solutions.
The company has a leading position in Thailand’s flavors market where there are very few producers of taste solutions. It is also among the most innovative flavors companies in Southeast Asia based on independent R&D.
The company’s broad portfolio of solutions includes flavors, seasoning blends and marinades, as well as specialty functional raw materials for the food and beverage industry with an emphasis on convenience foods, snacks, noodles, fish, meats, baked goods, beverages and dairy. It also has a portfolio of products and solutions adapted to Asian tastes based on the vast knowledge and experience of its managers.
Mighty’s activity also includes unique solutions for producing raw materials for the fields of infant nutrition and elderly nutrition and Frutarom intends to continue developing this activity in Thailand and other countries in the region.
Mighty’s activity also blends in with Frutarom’s expanding global savory activity which has grown significantly in recent years. Frutarom sees the strategic importance for rapid growth in the field of savory flavors in which it now holds a leading market position. The global market for savory flavors is growing due to the rise in the standard of living and changes in lifestyle and consumer habits bringing about increased demand for processed and convenience foods both for home consumption and for eating out.
At the time of the initial announcement, Ori Yehudai, President and CEO of Frutarom, said: “The acquisition of the Thai flavors company Mighty is an additional acquisition of activity in Frutarom’s core field which strengthens our global market leadership in the field of savory along with deepening our activity in the important growing region of Southeast Asia. It also continues Frutarom’s implementation of its rapid and profitable growth strategy and realization of its vision to be the preferred partner for tasty and healthy success.”
The acquisition seeks to contribute towards strengthening Frutarom’s position in Thailand while attaining a significant comparative advantage of proven innovative R&D capabilities and an advanced local sales and production center in one of Southeast Asia’s most important and fastest growing markets, according to Yehudai.
“We continue to view Southeast Asia as an important region in our map of future growth and are examining further transactions in the region that will allow accelerated growth in our core activities,” he added.
The Mighty acquisition was Frutarom’s eighth acquisition in 2017, following 27 acquisitions the company made since 2015 which have been integrated into their global activity. The acquisition seeks to contribute further growth in sales and improved profits and margins through maximal capitalization on the synergies they bring.
“We have an outstanding pipeline of further strategic acquisitions of companies and activities within the scope of our operations and we will continue carrying out our rapid, profitable growth strategy, which is based on combining profitable internal growth and strategic acquisitions, in order to achieve the targets we set: sales of at least US$2 billion with an EBITDA margin of over 22 percent in our core activities by the year 2020,” Yehudai concluded.
