Frutarom's acquisition of US flavor house Hagelin will bolster stance in North, South American markets

By Hank Schultz

- Last updated on GMT

Related tags: Alcoholic beverage

Frutarom's acquisition of US flavor house Hagelin will bolster stance in North, South American markets
Israel-based flavor and food ingredient firm Frutarom Industries has acquired US-based Hagelin Flavor Technologies for $52.4 million, the company announced Friday. Hagelin has corporate offices in New Jersey. In addition, the company has offices in the UK and in South Korea.

Frutarom, long known for its aggressive acquisition strategy, said the deal strengthens its position in the US, the world’s biggest flavor market.  I addition, the company said the acquisition would accelerate its move into Central and South America.

Beverage focus

Part of the strategy behind the acquisiton was a desire to move into the beverage flavors section.  Hagelin, with a beverage development facility in Georgia, is ideally placed to facilitate this move, Frutarom said. Hagelin, which posted revenue of  $24.2 million in 2012, up 7% from 2011, specializes in the development of advanced flavor solutions for the reduction of salt, sugar and calories and improvement of the taste experience. This acquisition expands Frutarom's global range of advanced products and technologies, which also covers soft drinks, functional drinks (which offer nutritional value), alcoholic beverages, and savory solutions (the non-sweet spectrum).

“This acquisition is yet another step in the growth of Frutarom's profitable flavor business in the US, a market we identified as a key strategic target.  Our US activity in recent years is exhibiting consistent organic growth that is at higher rates than the market's average growth rates, and the acquisitions we made in the past few years accelerated this growth and increased our market share,”​ said Ori Yehudai, CEO of Frutarom.

The acquisition is the fourth in 2013 and the company’s 12th​ since January, 2011, Yehudai said.  Frutarom intends to continue that pace into the foreseeable future, he said.

“We will continue to implement our rapid growth strategy and to identify and carry out additional acquisitions of companies and activities that are synergistic to our own. Our solid capital structure supported by the strong cash flow we generate will allow us to continue the successful implementation of our rapid and profitable growth strategy,”​ he said.

Frutarom now employs about 2,600 people and has offices and/or production facilities on every continent except Australia.

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