Glanbia acquires US firm Flavor Producers

Glanbia has acquired US-based Flavor Producers from its owners Aroma Holding Company for an initial cost of $300m (€281.6m).

The terms of the deal also include an additional deferred payment of up to $55m, which is dependant on the performance of Flavor Producers this year.

Flavor Producers provides flavours and extracts to the food and beverage industries, including organic and natural ingredients.

Glanbia plans to operate the newly acquired business within its nutritional solutions division.

The US flavour company, which was founded in 1981, reported net sales of $86.1m in the year to February 2024.

It also delivered adjusted earnings before interest, taxes, depreciation, and amortisation (Ebitda) of $19.7m in the same period.

Glanbia said the deal was consistent with its strategy to acquire complementary businesses, with Flavor Producers expanding the group’s capability in the natural and organic flavours market.

The transaction is expected to close in the coming months, subject to customary closing conditions and agreed completion accounts.

Glanbia expects that the deal will marginally increase the food and nutrition group’s adjusted earnings per share in its first full year of ownership.

“M&A is an important part of our growth strategy and this transaction represents a further opportunity to scale our nutritional solutions business, unlock synergies and acquire unique and complementary capabilities,” Glanbia chief executive Hugh McGuire said.

“This acquisition builds on our existing flavours capability and positions us well to capture longterm growth opportunities.”

Glanbia recorded a rise in profits in 2023, while revenues declined.

The group’s profit after tax rose to $298.1m last year, an increase from $248m a year earlier.

Revenues at the global nutrition group were down 8.7pc to $5.4bn in 2023, with Glanbia attributing the fall to changes in dairy pricing.