 "Israel's Frutarom buys 60% stake in flavours and fragrances firm Sonarome")
As a part of its growth strategy in India and Africa, Frutarom Industries Ltd, the Israel-based flavours and specialty fine ingredients company, has acquired 60 percent stake in the Bangalore-based flavours and fragrances company Sonarome Private Ltd for a cash payment of $ 17.2 million (for about Rs 109 crore) - reflecting a company value of $ 28.6 million. The purchase agreement includes an option for Frutarom to acquire the remaining balance of shares starting two years from now at a price conditional on the company's business performance.
Sonarome, which was founded in 1981, engages in the development, production and marketing of flavours and fragrances. Sales for Sonarome have grown quickly in recent years at a double-digit annual rate, reaching $ 12 million in 2014. Sonarome’s manufacturing, marketing, and research and development are based in Bangalore, where it has additional production capacity.
In addition to its activities in India, Sonarome has extensive activity in about 20 African markets, particularly in Nigeria, South Africa, Ethiopia, Kenya and Mozambique, which also constitute key growing target markets in Frutarom's growth strategy. Sonarome has a broad customer base that includes global and local food and beverages manufacturers.
The founders of Sonarome - TS Gulhati and Mrs R Gulhati, and their son N Gulhati - will continue in their roles with the company as management and shareholders.
According to Ori Yehudai, president and CEO, Frutarom Group, the acquisition of Sonarome is the continuation of the Frutarom Group's implementation of its rapid growth strategy and realisation of its vision 'to be the preferred partner for tasty and healthy success.' Frutarom has set itself the goal of expanding its activity in the emerging high-growth markets of India and Africa, both through internal growth and by means of acquisitions. The acquisition of Sonarome, one of India's leading domestic companies in the field of flavours and fragrances, is another key step towards attaining this goal, he added.
Combined with Sonarome's activity, Frutarom will continue to develop and deepen its presence in the important markets of India and Africa, capitalise on Sonarome's R&D and sales and marketing platform and integrate it with Frutarom's global R&D and sales and marketing infrastructure in order to leverage and realise the many cross-selling opportunities arising from this acquisition. Yehudai said, “We will also work towards leveraging Sonarome's production and supply chain capabilities to accelerate our growth in India.”
The acquisition of Sonarome will provide Frutarom with the advantages of a global manufacturer having a local R&D and production platform in cutting delivery time and improving service to customers in the region. It will also contribute towards accelerating the momentum of expanding activity in the growing markets of Africa where Frutarom began independent operations four years ago, which also gained a boost with the acquisition of JanDeRee in South Africa about two years ago. “In addition to its flavours activity, Sonarome maintains an excellent and growing infrastructure for activity in the field of fragrances as well, particularly in India and the emerging markets of Africa, and Frutarom will work towards utilising this infrastructure in penetrating additional emerging markets,” stated Yehudai.
Sonarome, which was founded in 1981, engages in the development, production and marketing of flavours and fragrances. Sales for Sonarome have grown quickly in recent years at a double-digit annual rate, reaching $ 12 million in 2014. Sonarome’s manufacturing, marketing, and research and development are based in Bangalore, where it has additional production capacity.
In addition to its activities in India, Sonarome has extensive activity in about 20 African markets, particularly in Nigeria, South Africa, Ethiopia, Kenya and Mozambique, which also constitute key growing target markets in Frutarom's growth strategy. Sonarome has a broad customer base that includes global and local food and beverages manufacturers.
The founders of Sonarome - TS Gulhati and Mrs R Gulhati, and their son N Gulhati - will continue in their roles with the company as management and shareholders.
According to Ori Yehudai, president and CEO, Frutarom Group, the acquisition of Sonarome is the continuation of the Frutarom Group's implementation of its rapid growth strategy and realisation of its vision 'to be the preferred partner for tasty and healthy success.' Frutarom has set itself the goal of expanding its activity in the emerging high-growth markets of India and Africa, both through internal growth and by means of acquisitions. The acquisition of Sonarome, one of India's leading domestic companies in the field of flavours and fragrances, is another key step towards attaining this goal, he added.
Combined with Sonarome's activity, Frutarom will continue to develop and deepen its presence in the important markets of India and Africa, capitalise on Sonarome's R&D and sales and marketing platform and integrate it with Frutarom's global R&D and sales and marketing infrastructure in order to leverage and realise the many cross-selling opportunities arising from this acquisition. Yehudai said, “We will also work towards leveraging Sonarome's production and supply chain capabilities to accelerate our growth in India.”
The acquisition of Sonarome will provide Frutarom with the advantages of a global manufacturer having a local R&D and production platform in cutting delivery time and improving service to customers in the region. It will also contribute towards accelerating the momentum of expanding activity in the growing markets of Africa where Frutarom began independent operations four years ago, which also gained a boost with the acquisition of JanDeRee in South Africa about two years ago. “In addition to its flavours activity, Sonarome maintains an excellent and growing infrastructure for activity in the field of fragrances as well, particularly in India and the emerging markets of Africa, and Frutarom will work towards utilising this infrastructure in penetrating additional emerging markets,” stated Yehudai.