The Israel-based company said the acquisition fitted its strategy of growing market share in developing regions with high growth rates.
Founded in 1985, Aromco focuses on developing markets with high growth potential in Eastern Europe, Africa and Asia plus building market share in the UK. It develops, manufactures and markets flavours for the beverage, dairy, confectionary, bakery and savoury sectors.
Its annual sales turnover reached £7.7m last year.
The acquisition will allow Frutarom to broaden market share in developing markets and strengthen its product supply chain. The firm also expects to develop Aromco’s innovation programme for flavour creation, development and application.
Based in Nuthampstead, Hertfordshire, Aromco employs 40 people and will be merged with the Frutarom business.
Operating synergies
Frutarom president and ceo, Ori Yehudai, said: "We will strive to maximize the numerous synergies among the different activities of Frutarom by utilizing the operating synergies in the different countries to accelerate the cross-selling opportunities and to achieve significant efficiencies and savings.
“The acquisition enriches Frutarom with a skilled and experienced research and development team, which will contribute to expanding our existing product and technology range enabling an enhanced offering to our customers.”
Earlier this year, Fruatrom acquired the savoury business of Christian Hansen Italia, herb, spice and seasoning company, East Anglian Food Ingredients and Norway-based food firm, Rieber & Søn.
Yehudai said: “... in the following quarters those acquisitions will contribute to improved profit and profitability. Those actions, along with continued optimization processes, strict management of expenses structure and continued adjustment of sale prices, will allow us to better utilize the diverse abilities of our production sites around the world, our innovation and the growing demand for health products.”
Strategic acquisitions
The company would continue to look for more strategic acquisitions, he added. “We strive to continue the realisation of the excellent pipeline of acquisitions in developed markets in the United States and Western Europe and developing countries focused on Asia, Central and South America and Eastern Europe. Our stable capital structure combined with world-leading banks' credit lines will enable us to continue carrying out additional strategic acquisitions.”
Meanwhile, last week Frutarom reported second quarter net profits down to £7.87m from £7.45m, blaming higher raw material prices.
Revenue rose 14.3% to reach £79.12m following its three acquisitions.