International Flavors & Fragrances Buys 50% Stake In Wiberg

International Flavors & Fragrances Inc. (NYSE:IFF) recently completed the acquisition of remaining 50% of the outstanding shares of Wiberg Corporation Inc.

Based in Oakville, Ontario, Canada, Wiberg Corporation is a subsidiary of the Austrian company Wiberg GmbH. It specializes in savory solutions which includes spices, blends and functional ingredients for the food industry and food processing equipment. Its focus is on convenience foods and processed meats, and on innovative culinary solutions for restaurants, catering firms, food service and chefs.

In 2015, Frutarom acquired Wiberg GmbH for $130 million, which included Wiberg’s 50% ownership share in its Canadian subsidiary. It is part of International Flavors’ Savory Solutions group and the Canadian subsidiary, servicing customers in Canada and parts of the United States.

The completion of the buyout meets International Flavors’ goal to expand its market leadership in savory solutions market globally. Moreover, following the acquisition, Wiberg Corporation will expand its offerings to customers by leveraging International Flavors’ products and technologies.

Last October, International Flavors & Fragrances completed the acquisition of Frutarom, an Israeli company which develops, produces and markets flavors and fragrances with expansion into fast-growing categories, like savory solutions, natural colors, natural food protection and health ingredients. Together, International Flavors and Frutarom created a global leader in natural taste, scent and nutrition, with a broader customer base, more diversified product offerings and increased exposure to end markets, including those with a focus on naturals, and health and wellness.

This January, International Flavors announced that its Frutarom Division has completed the buyout of 60% share capital of Thailand-based leading savory solutions company — The Mighty CO. LTD. (“Mighty”). The deal is in sync with Frutarom Division’s growth strategy in Southeast Asia. Moreover, the company is committed toward expanding its capabilities in savory solutions. Recently, the Frutarom division also acquired 70% stake in San Marino, Italy-based Leagel, a leading producer of ice cream and gelato ingredients. Through the deal, International Flavors & Fragrances will create a global platform for the ice-cream ingredients business, expand geographical presence and leverage cross-selling opportunities.

During the March-end quarter, International Flavors’ adjusted earnings per share declined 11.7% on a year-over-year basis to $1.57 per share. However, net sales jumped 39% year over year to $1.3 billion. Stellar legacy business performance and Frutarom aided double-digit growth in sales and adjusted operating profit in the quarter.

International Flavors has reaffirmed its guidance for 2019. Sales are projected in the range of $5.2-$5.3 billion, representing year-over-year growth of 5-7%. Adjusted earnings per share are expected in the band of $4.90-$5.10, reflecting year-over-year growth of 8-11% in 2019. Adjusted earnings per share, excluding amortization, are anticipated in the range of $6.30-$6.50.

The global market for flavors and fragrances continues to grow, propelled by rising demand for a variety of consumer products containing flavors and fragrances, which bodes well for the company's growth. Moreover, International Flavors, will gain on cost-cutting efforts, productivity initiatives, acquisitions despite input-cost inflation, unfavorable foreign currency and high debt levels.

International Flavors, along with Flexible Solutions International Inc. (NYSE:FSI) , Westlake Chemical Partners LP (NYSE:WLKP) and Sensient Technologies Corporation (NYSE:SXT) belong to the Chemical – Specialty industry.

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Internationa Flavors & Fragrances, Inc. (IFF): Free Stock Analysis Report

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