IFF, the S&P 500 flavor, fragrance, and cosmetics ingredients corporation, said it will enter into an agreement to sell its Savory Solutions Group to private equity firm PAI Partners for $900 million. The deal’s proceeds will be used mainly to reduce outstanding debt.
"The sale of IFF’s Savory Solutions Group is an important milestone as it allows us to focus on our highest-return businesses, improve our capital structure, and enhance our go-forward growth and return profile,” IFF Chief Executive Officer Frank Clyburn said in a December statement. “We appreciate the contributions of our Savory Solutions colleagues who have, for years, demonstrated their commitment to innovation, service and quality. We will work closely with PAI Partners to have a successful transition and look forward to Savory Solutions’ future under its ownership.”
“A key aspect of our strategy is to continuously evaluate our portfolio to identify opportunities to maximize shareholder value,” Clyburn added.
Savory Solutions, which generated about $475 million in revenue in 2022, produces ingredients for prepared foods, selling to butchers and manufacturers of plant-based products. Its business units operate out of Austria, Germany, Italy, Ireland, Poland, Canada, Thailand, and Mexico, employing 1,800 people and serving more than 11,000 global customers. The transaction’s $900 million valuation is 14x the last 12-month EBITDA.
IFF, which is also called International Flavors & Fragrances, is based in New York and has sales, manufacturing, and creative offices in 44 countries.
The deal is expected to close in the second quarter of 2023, pending customary closing conditions and regulatory clearances.