Naturex to Purchase Pure World

AVIGNON, France--French botanical extract supplier Naturex S.A. is purchasing Bedminster, N.J.-based PureWorld Inc. (NASDAQ:PURW) for $4.30 per outstanding share, about $36.8 million cash. Expected to close by late July, the transaction will include a 42-percent stake held by Paul Koether, chairman of PureWorld, and the overall per share price more than doubles the $2.03 per share price on June 3, the last business day before the June 6 acquisition announcement. PURW shares jumped to $4.25 within minutes of the announcement.

After a period of rapid growth followed by a growth plateau, Naturex reported in late 2004 it was planning to acquire two or three smaller plant extract businesses in Europe or North America. PureWorld, which owns PureWorld Botanicals and has a 35-percent non-voting stake in Gaia Herbs, is larger than the size originally targeted, but it will make the relatively young Naturex, founded in 1992, one of the leading plant extracts suppliers in the industry. Naturex, which generates 90 percent of its revenue abroad, including 50 percent from North America, already owns U.S.-based Brucia Extracts, which it bought in early 2002. Naturex posted $42.7 million last year; PureWorld generated $37 million last year, but its operating profits are smaller than those of Naturex. Jacques Dikansky, president of Naturex, said a shift from a lower margin product will improve profits at PureWorld, which recently posted improved results for its first quarter 2005.

Dikansky noted there are favorable synergies with the acquisition, especially on the commercial level, which will help the company's expansion into Asia, which currently only accounts for 6 percent of Naturex sales. "We also gain a big plant in New Jersey, where we can really do the same production in the United States that we currently have in Europe," he said. "We believe the combination of PureWorld with our group of companies will further enhance our collective efforts to become a leading player in the botanical extracts and natural ingredients markets."

Pure World would not comment on how the acquisition would affect current personnel and operations. However, in a press statement, Qun Yi Zheng, Ph.D., president and chief operating officer of Pure World said, "I am delighted with the combination of Pure World and Naturex and look forward to working with Naturex to continue to build our business."

Giuliani Capital Advisors and Canec International advised Naturex, and Adams Harkness advised PureWorld in the sale.