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Frutarom completes acquisition of 51% stake in Bremil

Published 01 June 2018

Frutarom has completed the acquisition of a 51% stake in Brazilian company Bremil Indústria, which produces savory solutions, for $30m (BRL111m).

This includes estimated asset adjustments prior to the date of completion.

The purchase agreement includes an option for the purchase of the balance of Bremil's shares, to take effect starting five years from the date of the transaction’s completion, at a price based on Bremil’s business performance during that period, as well as a mechanism of future consideration based on Bremil's future business performance. The transaction was financed through bank debt.

According to Bremil’s managerial reports, its revenues over the 12 month period ending April 2018 totaled approximately $38m (BRL140m).

Bremil was established in 1987 in the city of Passo Fundo in the Brazilian state of Rio Grande do Sul and holds a leading position in Brazil’s savory solutions market, with emphasis on convenience foods, prepared foods and processed meats.

Bremil, which employs about 250 workers, serves approximately 450 customers in Brazil and countries of the region, with substantial presence among top meat producers, and has two production sites, in southern and central Brazil, with significant excess production capacity which Frutarom intends to utilize towards raising output and growth in Brazil and neighboring countries.

Bremil provides its customers a complete portfolio of quality solutions based on natural ingredients and on a wide range of taste solutions and unique functional solutions which include seasoning blends, marinades, flavors, coatings, texture solutions, and solutions for food protection. Bremil also engages in the field of taste and functional solutions for baked goods.

The Bremil acquisition fits in well with Frutarom’s expanding global activity in savory solutions, strengthens its global leadership in this field and also provides Frutarom market leadership in Brazil and Latin America.

By leveraging Bremil’s specialized know-how and technology along with Frutarom’s expansive sales and marketing platform in Brazil and Latin America, Frutarom will work on expanding Bremil’s activity into additional countries as well as capitalizing on the many cross-selling opportunities for Frutarom products among Bremil customers.

Bremil’s founders and managers will continue managing the activity and they will also continue as shareholders with 49% of Bremil’s capital equity.

Frutarom Group president and CEO Ori Yehudai said: "The acquisition of Bremil is a continuation of the implementation of Frutarom Group's rapid profitable growth strategy and the realization of its vision 'to be the preferred partner for tasty and healthy success.

“This is an important strategic acquisition which enables Frutarom to make an additional major leap forward in strengthening its global leadership in savory solutions, as well as substantially reinforcing our position in the growing Brazilian market in particular and in Latin America in general.”

“I am convinced that this infrastructure will support the continued rapid growth of our activity in Latin America. In recent years Frutarom has been successfully implementing a strategy of rapid geographic expansion in North America and in emerging markets, which have higher rates of growth.

“This strategy has resulted in Frutarom sales in Latin America over the past seven years having grown by a factor of 16, and sales in emerging markets having grown fivefold, while Frutarom’s total sales grew by a factor of 3.3. Frutarom’s percentage of sales in Latin American reaches nearly 15% compared to approximately 3% in 2010 and the percentage of sales in emerging markets will be close to 45% of total Frutarom sales compared with 27% in 2010.”

Source: Company Press Release