Turpaz Industries has signed an agreement to purchase 60% of the shares of Food Base, a Hungarian manufacturer of flavours, vinegar powders, essential oils and herbal extracts.
The total consideration for the acquisition amounts to $9.5 million, from which 60% of Food Base’s net debt will be deducted from the transaction value upon completion.
As part of the agreement, Turpaz retains a call option to acquire the remaining shares of Food Base, which can be exercised three years after the completion of the transaction.
Founded in 2004, Food Base offers flavours and plant extracts to the European market.
Food Base, which employs 55 individuals, has an R&D centre, a marketing and sales system and is the proprietor of a “modern and efficient” production facility in Budapest. The factory features a large production capacity and holds a possibility for expansion.
The acquisition is expected to significantly increase Turpaz’s circle of customers and the volume of sales, while expanding its product portfolio, deepening its activities and its market share in emerging markets. Turpaz intends to use the development, production and sales capabilities of Food Base to grow its business in the area.
Karen Cohen Khazon, CEO of Turpaz, said: “This acquisition continues the implementation of the global growth strategy of the Turpaz Group, and strengthens our presence and our market share in emerging markets while continuing to strengthen Turpaz’s position as a leading global player”.
She continued: “The capabilities of Food Base and its many years of experience in the field of flavours for the food and beverage industry will be a strategic asset for Turpaz. We expect that sales in the markets where Food Base is active will continue to grow in the coming years as a result of changes in consumer preferences and the continued transition to the purchase of convenience food and health beverages as well as, as a result of the synergy of customers, products and technologies between the group companies.”
Tamás Győrfi, the CEO of Food Base, and all the employees of the company, have now joined Turpaz.
Győrfi commented: “The partnership between us will allow Food Base to grow based on the combined expertise, knowledge and geographic distribution of both companies and provide the best value to our customers in the markets in which we operate”.
The transaction will be funded through bank loans, and its finalisation is anticipated in the upcoming months, pending regulatory approvals in Hungary.
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