Frutarom Industries, a flavorings and specialty ingredients company based in Israel, would be acquiring 75% of Protein Technologies Ingredients (PTI) of Russia. The acquisition was worth USD50.3 million in cash. The terms of the agreement also entailed a provision for Frutarom to exercise an option to buy the entire company from minority shareholder Vantodio Holdings of Cyprus within the next three years. This was said by Frutarom in a statement on Monday.
Frutarom president Ori Yehudai said about the acquisition, "The combination of a local manufacturer supported by a global company should create significant advantages in the Russian market which, according to analysts, is expected to grow by up to 10 percent annually in the next few years - higher than the projected growth rates in Central Europe and the United State. We are convinced that this acquisition will further enhance the rapid growth and profitability of the Frutarom group."
PTI was established in 1996, and had been making raw materials including spice mixes, specialty protein and flavors for the food industry, especially in the segment of convenience foods and processed meat. PTI's savory flavor sales were at USD60 million last year, and have similar operating margins with Frutarom's flavour activity.
The consolidation of both companies was seen as strategic, as the activity of the Russian firm was synergetic to Frutarom's savory business worldwide, said Frutarom. The Israeli company said its acquisition of PTI will enable Frutarom to expand its product range and increase its activity and market share in several countries.
PTI has two production facilities clos to Moscow. It also has a distribution and sales center and a research and development facility in the Russian capital. PTI has a staff of 500.
The acquisition deal is nearing completion and Frutarom projected that it would be finalized in the next few days. Three of PTI's founders will be retaining their company and shareholder positions.
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