IFF sells flavor specialty ingredients business to Exponent for $220m
International Flavors & Fragrances Inc. (IFF) has announced the completion of its divestiture of the Flavor Specialty Ingredients (FSI) business to Exponent, a UK-based private equity firm. The transaction, which was previously announced in February 2023, garnered cash proceeds of $220 million.
International Flavors & Fragrances Divests Flavor Specialty Ingredients Division
The Flavor Specialty Ingredients business, which produces both synthetic and natural base aroma chemicals for the flavor market, boasts an extensive catalog of over 1,000 aroma chemicals and natural extracts. These ingredients primarily serve as inputs to the flavor market. International Flavors & Fragrances’ FSI division operates four dedicated manufacturing and distribution facilities located in the United Kingdom, United States, and China, with additional distribution points in Mexico, Brazil, and Hong Kong.
FSI, which has approximately 340 employees, serves over 970 customers and has generated more than $100 million in revenue in the last year.
Strengthening International Flavors & Fragrances’ Capital Structure
The cash proceeds from the divestiture, after accounting for taxes and expenses, will be utilized by IFF to decrease its outstanding debt, thereby strengthening the company’s capital structure.
Frank Clyburn, International Flavors & Fragrances CEO, commented on the deal, stating, “The sale of our FSI business unit is another step in our journey to continuously maximize value. Portfolio optimization is a central part of our ongoing strategy to improve growth and returns. This focus allows us to concentrate on our most attractive businesses and strengthen our capital structure by reducing outstanding debt. We’d like to thank our FSI colleagues for their demonstrated commitment to innovation, service and quality. We wish them the best for their new journey.”
With this strategic divestiture, International Flavors & Fragrances is well-positioned to focus more on its key business areas while reducing its financial liabilities.