Frutarom continues expanding its activity in Southeast Asia

Frutarom Industries Ltd., one of the world’s 10 largest companies in the field of flavors and natural specialty fine ingredients, continues its momentum of acquisitions and the implementation of its rapid and profitable growth strategy by announcing that it has signed an agreement for the purchase of 60 % of the shares of the Thai company The Mighty CO. LTD. (including the activity of Maharaj Food Co. Ltd. and Mighty International Co. Ltd., and hereinafter collectively: “Mighty”) for approximately THB 393 million (approx. US$ 12 million) (not including debt) and at a valuation of THB 655 million (approx. US$ 20 million) (not including debt).

In the framework of the transaction Frutarom will initially acquire 49 % of Mighty and, subject to a number of conditions precedent and regulatory approvals in Thailand, will raise its holdings to 60 %. The transaction includes a mechanism for future consideration subject to Mighty’s future performance and an option for the purchase of the balance of holdings in Mighty in two stages in periods beginning three years and five years from the date the transaction is completed. The first part of the transaction will be completed in the upcoming weeks and Frutarom estimates that raising its holdings to 60 % will be completed within several months. The acquisition will be financed by independent means and through bank debt.

Mighty’s sales turnover in the 12 months ended August 2017 totaled approx. THB 500 million (approx. US$ 15 million) after having registered average annual growth of 12 % over the past four years.

Mighty, which was founded in 1989, engages in the development, production and marketing of flavors, including savory taste solutions (the non-sweet spectrum of flavors). The company has a leading position in Thailand’s flavors market where there are very few producers of taste solutions, and is among the most innovative flavors companies in Southeast Asia based on independent R&D. In recent years Mighty has won a number of prizes as an innovative and leading flavors manufacturer in Southeast Asia. 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 emphasis on the field of convenience foods, snacks, noodles, fish, meats, baked goods, beverages and dairy, and it has a portfolio of unique 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 in the countries of the region.

Approximately 60 % of Mighty’s activity consists of manufacturing taste solutions, with market leadership in the field of savory taste solutions, while 40 % is trade activity in specialty raw materials for the food, beverages and nutrition industries.