Dive Brief:
- Glanbia Nutritionals has agreed to acquire Aroma Holding Company, which owns ingredients maker Flavor Producers, for an initial price of at least $300 million, plus additional deferred consideration of up to $55 million, it announced Monday.
- Flavor Producers is one of the largest makers of natural, organic flavoring and extracts within the food and beverage industry. Glanbia, based in Ireland, said the deal will help expand its Nutritional Solutions business with an array of new flavors and R&D capabilities, particularly in the U.S. where Flavor Producers is based. The deal is expected to close within the first half of 2024, according to the company.
- While mergers and acquisitions in the food and beverage category slowed down in the past two years, purchases like Glanbia’s indicate some major players in the space are still willing to spend their dollars to boost their presence in trendy categories like natural ingredients.
Dive Insight:
Hugh McGuire, Glanbia’s CEO, said in a statement M&A is important to the company’s growth strategy because it can help unlock new opportunities for the business, particularly within its Natural Solutions business as it aims to have a wider reach in flavorings.
“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,” said McGuire.
The Irish company is known for its sports nutrition products, including Optimum Nutrition protein powder. Glanbia Nutritionals is its ingredients arm which targets food and beverage producers, specializing in categories like micronutrients, proteins and dairy.
Flavor Producers specializes in Certified Organic flavorings with fruit, spice and herb taste profiles, from citrus to tropical to botanical. Its presence in the U.S. market can allow Glanbia to better compete with giants like Ingredion, Cargill and ADM.
Over the past decade, Glanbia has utilized M&A to boost its presence in the ingredients sector. In 2020, it acquired Canadian flavor designer Foodarom for roughly $45 million, which gave the company a greater presence in fruity, botanical and sweet flavorings.
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