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ADM to Acquire Wild Flavors for $3 Billion

Published on Jul 7 2014 7:05 AM in Supply Chain

ADM to Acquire Wild Flavors for $3 Billion

Archer Daniels Midland Co. (ADM) said it will acquire Wild Flavors GmbH, a maker of natural food ingredients, for about €2.2 billion ($3 billion) cash in what will be the U.S. company’s biggest takeover.

Wild Flavors is being acquired from shareholders Hans-Peter Wild and funds affiliated with Kohlberg Kravis Roberts & Co. LP, Decatur, Illinois-based ADM said today in a statement. The buyer will also assume net debt of about 100 million euros.

ADM outbid Japan’s Ajinomoto Co. (2802) for the maker of the Capri Sun juice drink and natural flavorings for beverage and food, people familiar with the matter said last week. The takeover will help the world’s top corn crusher diversify away from grain processing and gain a bigger foothold in overseas markets for food and beverages made with more natural raw materials.

“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 and significant room to grow,” ADM Chairman and Chief Executive Officer Patricia Woertz said in the statement. The acquisition will deliver cost and revenue benefits of €100 million in three years, she said.

ADM traded at the equivalent of $45.92 in early Frankfurt trading, up 0.3 percent on the July 3 closing price in New York.

Wild Flavors, which competes with Germany’s Symrise AG and Switzerland’s Givaudan SA, has production sites across Europe, the Middle East, Asia and the Americas. Sales were 838 million euros in 2012, and are forecast to grow to about €1 billion this year, according to today’s statement.

Expansion Priorities

New York-based KKR, run by Henry Kravis and George Roberts, bought a stake in 2010 and now owns 35 percent, according to KKR’s website. Wild, son of founder Rudolf Wild, owns the rest.

In 2012, Wild Flavors bought the juice blends business of Cargill Inc., adding more than $200 million to its annual sales and a platform to grow in Asia and North America.

ADM plans to invest more than 60 percent of its capital expenditures into assets outside the U.S., President and Chief Operating Officer Juan Luciano said in April.

“We are still underrepresented in the rest of the world,” he said at the time.

Barclays Plc is acting as financial adviser to ADM, with Skadden, Arps, Slate, Meagher & Flom LLP providing legal advice.

Bloomberg News edited by ESM

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