ADM Buys Wild Flavors for €2.3 Billion
Archer Daniels Midland Company is acquiring Wild Flavors, headquartered in Zug, Switzerland.
In an all-cash transaction valued at approximately €2.3 billion enterprise value, ADM will pay €2.2 billion to Wild Flavors shareholders Dr. Hans-Peter Wild and funds affiliated with Kohlberg Kravis Roberts & Co., and assume approximately €0.1 billion of net debt. The transaction is contingent on regulatory approvals and is expected to close by year end.
"This acquisition expands ADM's ability to serve customers' evolving needs today and well into the future," said ADM Chairman and CEO Patricia Woertz. "Natural flavor and ingredients is one of the largest and fastest-growing consumer trends in both developed and emerging markets, and Wild Flavors is the world's leading provider of natural flavor systems to the food and beverage industry."
Wild Flavors, with estimated 2014 net revenues of about €1 billion, offers food and beverage companies full flavor and ingredient solutions-known as flavor systems-and fruit juice concentrates and blends, as well as other food and beverage ingredients.
"Together, ADM and Wild Flavors will create one of the leading flavor and specialty ingredient companies in the world, with sales approaching $2.5 billion," Woertz said. "The addition of Wild Flavors balances and extends our value chain. It is consistent with our long-term strategy to diversify the crops we process and expand and diversify our product portfolio. It complements the ingredient, organic-growth investments we've recently made-including our Brazil protein complex and soluble-fiber expansion in China. And it is consistent with actions we've taken to dampen the volatility of our earnings mix and deliver on our commitment to profitable growth. The acquisition will meet our return objectives, with estimated cost and revenue synergies of €100 million by year three."
Dr. Hans-Peter Wild, chairman of Wild Flavors, said, "I am very pleased by ADM's acquisition of Wild Flavors and the future business we will build together. With the strong financial resources, and expanded customer base, product offering and global footprint, I am confident Wild Flavors will be well-positioned for growth."
"We have tremendous respect for the culture and business that Dr. Wild has built," Woertz said. "Given the strong brand Wild Flavors has with customers around the world, we intend to maintain the Wild Flavors name. We appreciate the difference in our business models, and will support continued success of the Wild Flavors model by establishing a new business unit called Wild Flavors and Specialty Ingredients. The new unit will include many of our specialty ingredients. We are also excited to work with the Wild Flavors team. With more than 400 scientists and applications specialists and a global sales force, they will bring exceptional expertise and new capabilities."
