In a significant business move, Swiss firm Clariant AG (SIX:CLN) is set to acquire a cosmetic ingredients division from International Flavors & Fragrances Inc. (IFF) for $810 million. The division includes prominent brands such as Lucas Meyers Cosmetics and IBR. The deal, expected to close in the first quarter of 2024, has been devised to aid IFF in reducing its debt and strengthening its capital structure.
The announcement was made by IFF's CEO, Frank Clyburn. The division that Clariant will acquire operates six global sites dedicated to research and development as well as production. Last year, this business unit generated roughly $100 million in revenue.
Following the completion of the acquisition, IFF plans to focus on its core businesses as part of a strategy to enhance growth and returns.
InvestingPro Insights
In the light of this significant business move, it's crucial to keep an eye on the financial metrics of both companies. According to InvestingPro's real-time data, Clariant AG (CLN) has a Price/Earnings ratio of 31.0 and a Price/Book ratio of 0.99 as of Q4 2023. It also has a revenue of 95.07M USD, showing a significant potential for growth.
Two key InvestingPro Tips for CLN include the fact that the company has a high shareholder yield and is expected to see net income growth this year. This implies that the acquisition could further boost its financial performance. For more tips, visit InvestingPro, which provides 10 more insights about CLN.
On the other hand, International Flavors & Fragrances Inc. (IFF) has a market cap of 17.32B USD, with a negative P/E ratio of -7.88 as of Q2 2023. Its revenue stands at 11.86B USD. Two noteworthy InvestingPro Tips for IFF are that it has raised its dividend for 20 consecutive years and is expected to see growth in net income this year. This suggests that the sale of its cosmetic ingredients division could help improve its financial health. An additional 9 tips about IFF are available at InvestingPro.
Both companies' financial metrics and tips highlight the potential benefits of this acquisition for their respective financial futures.
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