Israel-based multinational flavour and fruit ingredients company Frutarom Industries has agreed to acquire 100 per cent of Taura Natural Ingredients Holding - founded in Tauranga three decades ago as a citrus growers co-operative - for US$70 million ($101 million).

Taura will be acquired from Australian private equity firm CHAMP Ventures, which partnered with management to buy the company in 2007. CHAMP was understood to hold 87 per cent of Taura, with the rest held by staff shareholders. Frutarom said Taura's highly experienced management team, led by Belgian-based chief executive Peter Dehasque who has been with the company for almost two decades, would continue to lead the company.

"This strategic move represents a major milestone in fuelling Taura's continued profitable growth into the high-value, high-growth segments of natural foods and nutritional snacks," said Mr Dehasque.

Taura's New Zealand general manager, Peter Tinholt, said he was unable to comment on the transaction. However, the Bay of Plenty Times Weekend understands there will be no change in its Mount Maunganui manufacturing and export sales operations.

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Frutarom Group president and chief executive Ori Yehudai said the company would benefit from bringing on board Taura's effective management team and employees at every level.

Taura developed its proprietary URC (ultra rapid concentration) dehydration process in Tauranga. This concentrates fruit purees into pieces, flakes and pastes for use in applications such as chocolate, baked goods, confectionery and snack bars. The firm manufactures ingredients that go into the snack and cereal offerings of major global food companies. It also develops products with multinational brands, including a recent partnership with Welch's, America's largest grape juice brand.

Taura was founded in 1973 as part of a New Zealand agricultural co-operative and has developed into a world-leading player in concentrated and texturised fruit ingredients, with state-of-the-art manufacturing facilities in New Zealand and Belgium, along with sales offices in the US and in the UK, and a total workforce of 130 employees. Taura has a broad customer base that includes leading global and national food and beverage-makers in the US, the Asia-Pacific and Europe.

Frutarom, one of the world's 10 largest companies in the ingredients field, will pay cash for Taura, which had sales of about US$40 million to March 31, 2015, no debts, and cash in hand of approximately US$2.5 million. The agreement includes payment of an additional US$3.5 million, conditional on Taura's business performance over the next 12 months.

Peter Tinholt, GM Taura Natural. Photo/file
Peter Tinholt, GM Taura Natural. Photo/file

Frutarom focuses on developing and producing natural products and views these as an important strategic growth engine. More than two-thirds of Frutarom's products today are natural and the company invests heavily in developing innovative products, factors which were seen as a complementary fit for Taura's activities.

"Through its global footprint and infrastructure, Frutarom will enhance Taura's presence dramatically in key growth markets, untapped geographies, new business segments and new customers and will set the scene for solid growth in the US market, one of our key strategic imperatives," said Mr Dehasque.
"We will significantly enhance our access to a whole raft of natural raw materials, which can easily be integrated into our URC, fruit-based materials, laying a solid foundation for leading-edge innovation for years to come."

Having access to Frutarom's strong scientific and technological expertise was expected to lead to cross-fertilisation and further boost Taura's specialised portfolio, he said.
Taura is Frutarom's seventh acquisition this year and Mr Yehudai said the purchase continued the company's rapid growth strategy.

"This acquisition continues to solidify Frutarom's position as one of the world's top companies in its field and reinforces its presence and standing as a leading global producer for natural flavour and fruit solutions."

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The acquisition would aid Frutarom's growth in Asia-Pacific markets, especially Australia and New Zealand, while for the first time the company would have R&D, sales and marketing platforms and a production site located in New Zealand.

"Taura has long-established relationships with leading customers in these countries that can serve as a springboard for offering them our full unique range of products," said Mr Yehudai.

The Facts
Taura has sales and manufacturing operations in Tauranga, New Zealand (for Asia-Pacific), Belgium (for Europe) and a sales operation in Virginia, US (for North America).

Frutarom Industries is listed on the Tel Aviv and London stock exchanges. Its major shareholder is New York-based ICC Industries. Frutarom employs about 3300 people worldwide, with sales and manufacturing facilities in Israel, Europe, the US and Asia.

By David Porter