US agribusiness Archer-Daniels-Midland (ADM) said it would buy UK-based flavour and ingredient firm FDL, as the company looks to expand its nutrition business.
ADM, one of the world's largest grain traders and a major food processor, has diversified into the flavours and nutrition food business through takeovers in the sector, starting off with an acquisition of WILD Flavors for $3 billion (€2.7 billion) in 2014.
FDL operates three production facilities in the UK and would record projected sales of about $120 million (€109.4 million) in 2023, ADM said.
The company did not disclose the financial details of the deal but said it expects the transaction to close by the end of January.
“Our ongoing investments to add to our flavours portfolio are helping power our strategic work to build a global leader in nutrition,” said ADM executive Calvin McEvoy in a statement.
Eric Beatty, CEO of FDL added, “They’re [ADM] an ideal partner for us, with global nutrition and flavour capabilities that will provide new opportunities to strengthen FDL’s portfolio of taste and nutrition solutions.”
Revela Foods
The move follows ADM's acquisition of Revela Foods, a Wisconsin-based developer and manufacturer of dairy flavour ingredients and solutions.
Brokerage BMO Capital Markets said on Monday while ADM would likely face pressures on soy crush margins and ethanol margins in 2024, the company's efforts to increase its portfolio through segments like nutrition should improve returns.
The company said that with Revela's projected sales of almost $240 million in 2023, it would add new capabilities to ADM's global flavours portfolio in the $1.8 billion (€1.6 billion) global dairy flavours segment.
The deal is expected to close in early 2024. ADM did not provide any financial details of its deal to buy Revela.
News by Reuters, additional reporting by ESM.
