January 5, 2023

By Lynda Kiernan-Stone, Global AgInvesting Media

Food and consumer industry-focused private equity firm PAI Partners has entered into an agreement with IFF to acquire its Savory Solutions Group through a deal valuing the business at approximately $900 million. 

Focusing primarily on ingredients for prepared foods and foodservice, the IFF Savory Solutions Group includes several business units providing products for butchers and the plant-based, vegan, and vegetarian markets. It has 17 manufacturing facilities and nine innovation sites with 1,800 employees across Austria, Germany, Italy, Poland, Canada, Mexico, and Thailand, serving 11,000 customers generating approximately $475 million in revenue over the past 12 months.

For IFF, the sale reflects a dedication to streamlining. Company CEO Frank Clyburn explained, “A key aspect of our strategy is to continuously evaluate our portfolio to identify opportunities to maximize shareholder value.”

“The sale of IFF’s Savory Solutions Group is an important milestone as it allows us to focus on our highest-return businesses, improve our capital structure and enhance our go-forward growth and return profile,” continued Clyburn.

“We appreciate the contributions of our Savory Solutions colleagues who have, for years, demonstrated their commitment to innovation, service and quality. We will work closely with PAI Partners to have a successful transition and look forward to Savory Solutions’ future under its ownership.”

The DuPont Factor

It was in December 2019 when an announcement was made that International Flavors & Fragrances (IFF) and DuPont agreed to merge DuPont’s Nutrition and Biosciences (N&B) business with IFF through a deal that values DuPont’s N&B business at $26.2 billion.

The agreement brought together two companies that (at the time) had combined estimated revenues of $11 billion, and created a global giant, under the new name IFF, with a value exceeding $45 billion.

As consumers continue to demand shorter, more transparent ingredient lists, including more natural, healthier, and plant-based ingredients, the reliance of food manufacturers on companies such as IFF and N&B also increases. At the time this merger was announced it was expressed that this resulting company would have a mega-presence on the global flavors and ingredients market, taking a lead position in key taste, texture, scent, nutrition, enzymes, cultures, soy proteins, and probiotics categories.

As expected, this deal was finalized in Q1 2021, resulting in a global leader in high-value ingredients and solutions that respond to customer demands and preferences for natural, healthier, and “better for you” products.

“We are thrilled to officially unite IFF and N&B, forging a leader in the global consumer goods and commercial products value chain that will redefine our industry and create a leading ingredients and solutions provider for our customers across a broad range of end-markets,” said Andreas Fibig, IFF chairman and CEO, in 2021.

“Our organizations have deep histories of creativity, innovation excellence and a shared commitment to care for our communities. With our combined platform, IFF is an essential partner for our customers, uniquely positioning us to address our customers’ evolving needs, unlock long-term value creation and accelerate our pursuit of new, creative and integrated solutions.”

~ Lynda Kiernan-Stone is editor in chief with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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