15th Apr 2024 09:41
(Alliance News) - Glanbia PLC on Monday said it has made headway on its growth strategy as it agreed to buy Flavor Producers LLC.
The Kilkenny, Ireland-based nutritional products maker will acquire the Valencia, California-based natural and organic flavouring business from its current owner Aroma Holding Co for an initial USD300 million.
This will be followed by a deferred payment conditional on performance of up USD55 million.
Glanbia said the purchase will be financed from existing banking facilities and cash. The EUR100 million share buyback programme it launched back in February is unaffected by the new deal, it noted. Glanbia had net debt of USD248.7 million at the end of 2023.
For the year that ended this past February, Flavor Producers recorded USD19.7 million in adjusted earnings before interest, tax, depreciation and amortisation on USD86.1 million in net sales. It was founded in 1981 and specialises in plant-based flavour and extract creation.
The acquisition is expected to improve Glanbia's vertical integration and deliver operating synergies, it said.
Glanbia Chief Executive Officer Hugh McGuire said: "[the acquisition] represents an important step in the continued growth of our nutritional solutions business. This acquisition builds on our existing flavours capability and positions us well to capture long term growth opportunities in the organic and natural flavours segments."
The deal is expected to close in the first half of 2024.
Glanbia shares were up 7.1% to EUR18.10 in London on Monday morning.
By Elijah Dale, Alliance News reporter
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