12 Dec 2017 --- The shareholders of Israeli specialty chemicals company Enzymotec Ltd. have approved by large majority the merger transaction between Frutarom and Enzymotec. The transaction was approved at Enzymotec’s General Meeting by 99.9 percent majority of shareholders present at the meeting and entitled to vote, Frutarom Industries Ltd. reports.
Following approval by Enzymotec’s General Meeting, completion of the merger transaction is expected within 30 days, following which Enzymotec will be delisted from trading on NASDAQ and become a fully owned subsidiary of Frutarom.
In exchange for acquiring full ownership of Enzymotec, Frutarom will pay approximately US$210 million net of cash, deposits and securities in Enzymotec’s treasury (including the cost of redeeming options and RSUs plus projected transaction costs). The merger transaction as approved will be carried out at a price of US$11.90 per share of Enzymotec, which will be paid to its shareholders upon completion of the transaction.
Frutarom notes that it is preparing to fully integrate Enzymotec’s activity with its Natural Specialty Fine Ingredients Division while rapidly capitalizing as much as it can on the many existing synergies between Frutarom and Enzymotec in order to bring about an acceleration of growth, improvement in cost structure and significant improvement in profitability for Enzymotec’s activity.
Rapid integration for accelerated growth “We are in the final stages of formulating a plan for the complete merging of all Enzymotec activities with Frutarom, which will enable full rapid integration and the streamlining of the global activities of both companies in management, R&D, sales, marketing, production and the supply chain,” says Mr. Ori Yehudai, President and CEO of Frutarom Group. “In the framework of the merger and maximizing efficiencies, Frutarom’s headquarters in Israel will be combined with Enzymotec’s at the latter’s modern plant at Migdal Ha’Emek.”
“We will work towards accelerating growth of the joint activities of Frutarom and Enzymotec, with maximal realization of the significant cross-selling opportunities arising from the acquisition, significant business development that will enable the expansion of Enzymotec’s businesses to additional countries in which Frutarom has a presence, and a broadening of the product portfolio to Enzymotec’s and Frutarom’s existing customer base,” continues Mr. Yehudai.
In addition, Mr. Yehudai notes that Frutarom will work to achieve maximum operational and business efficiencies to improve the cost structure and exploit the great potential inherent in the large investments made in Enzymotec. This will include emphasis on maximum utilization of its modern plant into which US$ 40 million has been invested and the pipeline of new products that were developed over recent years in Enzymotec’s R&D labs at an investment of approximately US$30 million.
“We especially see Enzymotec’s specialty nutrition segment as playing an important part in our future profitable growth strategy that will contribute to the expansion of the portfolio of comprehensive solutions for customers of both companies in the field of pharmaceuticals, dietary supplements, designated foods for infants in the field of infant formula as well as in elderly clinical nutrition,” adds Mr. Yehudai. “We will allocate additional resources to accelerate our growth in these fields where we see significant business potential.”
“We are making progress in evaluating strategic alternatives for the activity of VAYA in the field of medical food which will be implemented in order to maximize value arising from this activity for Frutarom shareholders,” comments Mr. Yehudai.
Frutarom views Enzymotec as a significant base for establishing an excellence center for R&D and innovation in Israel, Mr. Yehudai notes, adding that it will consolidate the existing R&D activities of both companies. It is also hoped that it will become a global base for developing new technologies for specialty fine ingredients in the realms of food and health, with maximum utilization and integration of Enzymotec’s R&D infrastructure. These plans come as an innovation incubator is currently being set up by Frutarom after winning an Israel Innovation Authority tender.
“Innovation and investment in specialized R&D are the basis for ensuring our continued rapid, profitable and unique growth,” Mr. Yehudai adds. “Over 750 R&D personnel at 82 laboratories around the world will get reinforcement from an increase in investment and the building of the excellence center in Israel.”
“In addition, we will work to expand external R&D in combination with the many collaborations with universities, research institutes and startups throughout the world in order to bring maximum and unique added value to our more than 30,000 customers in over 160 countries,” Mr. Yehudai concludes.
Mr. Yehudai discussed Frutarom’s acquisitions strategy, along with other topics including consolidation and efficiency, in an interview with NutritionInsight’s sister website FoodIngredientsFirst earlier this year. The interview can be found here.
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