IFF sells natural ingredients business, transaction amount undisclosed

Key Takeaways

• IFF announced it will sell its functional ingredients and natural color business portfolio to nutritional supplements company SuanNutra for an undisclosed amount.
• The deal is expected to close by the end of this year and includes IFF's plant extracts, vitamins and minerals, food fortification assets, as well as its natural color and antioxidant product lines.
• The sale comes only about two months after the flavors and fragrances giant announced it would sell its food ingredients business to CVC Capital Partners for $4.3 billion, in a move aimed at improving profitability.

Deep Dive

The ingredients industry is becoming a hotbed for M&A activity as more food companies seek to reformulate their products to meet consumer concerns about health and wellness.

Two multi-billion-dollar ingredient deals have been struck in the past few months. In addition to IFF selling its food ingredients business for $4.3 billion in May, Ingredion also reached an agreement to acquire competitor Tate & Lyle for $3.6 billion.

IFF said in a press release that its natural ingredients business generated approximately $170 million in revenue last year.

SuanNutra's owner, Carbyne Equity Partners, said in a statement that the deal places the company at the center of the industry's shift from synthetic dyes, preservatives, and flavors to natural and clean-label ingredients. The transaction with SuanNutra includes five production facilities located in the United States, Europe, and Latin America.

"Clinically supported branded ingredients are where this industry is heading," said Yoni Glickman, non-executive chairman of SuanNutra. "This expansion puts SuanNutra at the forefront of this transformation."