International Flavors Completes Acquisition Of David Michael

New York-based International Flavors & Fragrances Inc. (NYSE:IFF) recently announced that it has successfully completed the acquisition of Philadelphia, PA-based David Michael & Company, Incorporated. Financial terms of the deal were not disclosed.

As revealed, David Michael & Company, a privately held flavors company, is recognized for its product line in the dairy and beverages industries. Among many products, the firm’s vanilla-based flavors deserve a special mention.

International Flavors & Fragrances, as disclosed earlier, funded the transaction through its existing resources.

With the addition of David Michael & Company, International Flavors & Fragrances expects to boost its flavors business in the fast-growing middle-markets of North America. In addition to complimenting the company’s IFF-Ottens Flavors business, the acquired assets will likely generate incremental revenue of $85 million in 2017.

We believe such acquisitions are consistent with International Flavors & Fragrances’ expansionary policy and its Vision 2020 business strategy. The company prefers to invest in acquisitions as a means to gain access to new customers, regions and technologies. A diverse portfolio and product mix, along with new business wins, should help International Flavors & Fragrances deliver solid results in the quarters ahead.

Despite these positives, exposure to near-term headwinds has limited International Flavors & Fragrances’ growth momentum. The company, with a market capitalization of $10.8 billion, currently carries a Zacks Rank #3 (Hold).

Also, some of International Flavors & Fragrances’ prime competitors continue to perform well, having gained high Zacks rankings. Better-ranked stocks in the industry include Green Plains Inc. (NASDAQ:GPRE) , NL Industries Inc. (NYSE:NL) and Chemtura Corporation (NYSE:CHMT) . While both Green Plains and NL Industries sport a Zacks Rank #1 (Strong Buy), Chemtura Corporation carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Green Plains Inc. has witnessed upward earnings estimate revisions for 2016 and 2017 over the past 60 days.

NL Industries Inc. reported better-than-expected results in the last two quarters. Also, the company’s bottom-line estimates have improved for 2016 and 2017 over the past 60 days.

Chemtura Corporation’s earnings track record is impressive, with an average positive earnings surprise of 4.68% for the last four quarters. Also, the company has witnessed positive revisions in earnings estimates for 2016 and 2017 over the last 60 days.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>