Frutarom Industries Ltd, an Israel-based manufacturer of flavours and fine ingredients, has acquired 60 per cent stake in Bangalore-based fragrance and flavour maker Sonarome Pvt Ltd for $17.2 million, the company said in a press release. The Israeli company will pay the amount through bank debt.
As per the purchase agreement, Frutarom will buy the remaining stake in Sonarome within two years at a price based on the company's financial performance.
Husband wife duo TS and Ramandeep Gulati, founders of Sonarome, will continue to play their roles with the company.
Founded in 1981, Sonarome is engaged in development, production and marketing of flavours and fragrances. The company reported sales of $12 million in 2014. The firm, whose manufacturing facility is located in Bangalore, is active in the markets of Africa particularly in Nigeria, South Africa, Ethiopia, Kenya and Mozambique.
"The acquisition of Sonarome is part of Frutarom Group's growth strategy Frutarom aims to expand its operations in the emerging high-growth markets of India and Africa," said Ori Yehudai, president and CEO of Frutarom.
"It 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," added Yehudai.
Frutarom has two core activities—the flavours segment which develops, produces and markets flavour compounds and food systems, and specialty fine ingredients unit which develops, produces and markets natural flavour extracts, food ingredients, food colors, etc.
The company has its plants in the US, the UK, Switzerland, Germany, Spain, Italy, Slovenia, Russia, Turkey, Israel, South Africa, China, Guatemala, Peru, Chile and Brazil, and has over 16,000 customers across 150 countries.
KPMG Corporate Finance acted as the exclusive advisor to Sonarome on this deal.
In the space, recently Mumbai-based fragrance and flavour maker S.H. Kelkar & Co. Pvt Ltd filed its draft red herring prospectus (DRHP) with securities market regulator SEBI to float its initial public offer (IPO).