IFF is set to sell its Flavor Specialty Ingredients (FSI) segment to UK-based private equity firm Exponent for US $220 million. The deal will most likely be finalised in the third-quarter of this year, subject to the usual closing conditions.
This follows two weeks after the news that the company was selling its Savory Solutions Group (SSG) for US$900 million.
Speaking about the transaction, IFF’s CEO Frank Clyburn said: “The sale of FSI will improve our capital structure while allowing us to focus on our core businesses to enhance growth and returns. We appreciate the contributions of our FSI colleagues, who have shared our commitment to quality and customer service. We will work closely with Exponent to have a successful transition and look forward to FSI’s bright future.”
He continued: “Aligned with our strategy, we’re continuously evaluating our portfolio to identify opportunities to strengthen our financial profile.”
In its full-year results for 2022, IFF disclosed it reduced its long-term debt by US$944 million last year – from US$14.8 billion to US$13.86 billion).
We’re continuously evaluating our portfolio to identify opportunities to strengthen our financial profile
IFF is looking to maximise shareholder value and reduce debt in a portfolio optimisation strategy. FSI is a manufacturer of synthetic and natural base aroma chemicals used in the flavour market and reports through IFF’s Scent division.
Clyburn added: “IFF’s FSI is a leading manufacturer of specialty base aromas with a broad range of more than 1,000 aroma chemicals and natural extracts, which provide inputs primarily to the flavour market.”
FSI includes four dedicated manufacturing and distribution facilities at Teesside and Hartlepool, UK; Cincinnati, US; and Pucheng, China, with additional points of distribution in Mexico, Brazil and Hong Kong.
Elsewhere, in 2022 IFF completed the acquisition of Health Wright Products, a move set to bring formulation and finished format capabilities to IFF’s Health & Biosciences probiotics. IFF is also expecting sales to grow in 2023 by 6%.
