REG - Glanbia PLC - Glanbia agrees to acquire Flavor Producers

GlanbiaAnnouncement

15/04/2024 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240415:nRSO5308Ka&default-theme=true

RNS Number : 5308K  Glanbia PLC  15 April 2024

Glanbia agrees to acquire Flavor Producers for initial consideration of $300
million

 

15 April 2024. Glanbia plc ("Glanbia" or the "Company"), the Better Nutrition
company, is pleased to announce that it has entered into an agreement with the
shareholders of Aroma Holding Company, LLC and related entities, the owners of
Flavor Producers LLC ("Flavor Producers") to acquire the business for an
initial consideration of $300 million plus deferred consideration (the
"Transaction").

 

Transaction overview and rationale

Flavor Producers is a leading flavour platform in the US, providing flavours
and extracts to the food and beverage industries, with a focus on organic and
natural ingredients. Glanbia will operate Flavor Producers within its Glanbia
Nutritionals ("GN"), Nutritional Solutions business ("NS" or "Nutritional
Solutions").

The Transaction is consistent with Glanbia's strategy of acquiring
complementary businesses to grow its Better Nutrition platforms.  Flavor
Producers significantly expands NS's flavours offering, bringing new
capabilities in the attractive and growing natural and organic flavours market
which are aligned with long term consumer trends.

 

Transaction highlights include:

·     Flavor Producers is a leading independent flavours business in the
US which represents a synergistic fit with the existing flavours capability of
NS;

·     Acquiring an established platform with a 40 year plus history, a
strong team and a track record of innovation;

·     Excellence in R&D and proprietary ingredients with best-in-class
formulation capabilities. Extensive flavour library and vertical integration
into flavour extracts, facilitating clean label solutions;

·     Financially attractive margin and growth profile which will improve
business mix within NS; and

·    Consistent with Glanbia's balanced capital allocation framework and
retaining a strong financial position post Transaction.

 

Commenting on the Transaction, Hugh McGuire, Chief Executive Officer of
Glanbia said:

"I am delighted to announce the acquisition of Flavor Producers, which
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. M&A is an important part of our
growth strategy and this Transaction represents a further opportunity to scale
our NS business, unlock synergies and acquire unique and complementary
capabilities."

 

Transaction consideration, financing and closing

The initial consideration is $300 million with an additional deferred payment
of up to $55 million, conditional on performance in 2024. Final consideration
will also be impacted by the value of actual working capital and customary
completion accounts at closing. The Transaction will be financed by Glanbia's
existing banking facilities and cash. Glanbia has a strong balance sheet with
net debt of $248.7million at the end of FY 2023, a net debt to adjusted EBITDA
ratio of 0.5 times and $1.3 billion of committed debt facilities.

It is anticipated that the Transaction will close in the first half of FY 2024
subject to customary closing conditions and agreed completion accounts.

The Transaction is expected to be marginally accretive to Glanbia's adjusted
earnings per share in its first full year of ownership.

The Company's current €100 million buyback programme announced on 28
February 2024 is ongoing and is unaffected by this Transaction.

 

About Flavor Producers

Flavor Producers was founded in 1981 as a family business in Valencia,
California. They pioneered the development of natural and organic flavours by
sourcing raw materials from nature. Plant-based flavour and extract creation
is the Company's specialty, with unique technologies that deliver
transparently delicious taste to food and beverages. Today, Flavor Producers
is a leading developer and manufacturer of natural and organic flavours in
North America. Flavor Producers serves leading FMCG companies as well as high
growth and emerging consumer brands.

In the 12 months to February 2024, Flavor Producers delivered $86.1 million
net sales and adjusted EBITDA (before non-recurring costs) of $19.7 million.
The gross assets of Flavor Producers as at February 2024 were $321 million.

 

ENDS

For further information contact:

Glanbia plc

Mark Garvey, Chief Financial Officer

Liam Hennigan, Group Secretary & Head of Investor Relations    +353 86
046 8375

Martha Kavanagh, Director of Corporate Affairs
                      +353 87 646 2006

 

Cautionary statement

This announcement contains forward-looking statements. These statements have
been made by the Directors in good faith based on the information available to
them up to the time of their approval of this announcement. Due to the
inherent uncertainties, including both economic and business risk factors
underlying such forward-looking information, actual results may differ
materially from those expressed or implied by these forward-looking
statements. The Directors undertake no obligation to update any
forward-looking statements contained in this announcement, whether as a result
of new information, future events, or otherwise.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQFFFIISIISLIS