Naturex to Purchase PureWorld

Naturex to Purchase PureWorld

AVIGNON, FranceFrenchbotanical extract supplier Naturex S.A. is purchasing Bedminster, N.J.-basedPureWorld Inc. (NASDAQ:PURW) for $4.30 per outstanding share, about $36.8million cash. Expected to close by late July, the transaction will include a42-percent stake held by Paul Koether, chairman of PureWorld, and the overallper share price more than doubles the $2.03 per share price on June 3, the lastbusiness 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 smallerplant extract businesses in Europe or North America. PureWorld, which ownsPureWorld Botanicals and has a 35-percent non-voting stake in Gaia Herbs, islarger than the size originally targeted, but it will make the relatively youngNaturex, founded in 1992, one of the leading plant extracts suppliers in theindustry. Naturex, which generates 90 percent of its revenue abroad, including50 percent from North America, already owns U.S.-based Brucia Extracts, which itbought in early 2002. Naturex posted $42.7 million last year; PureWorldgenerated $37 million last year, but its operating profits are smaller thanthose of Naturex. Jacques Dikansky, president of Naturex, said a shift from alower margin product will improve profits at PureWorld, which recently postedimproved results for its first quarter 2005. Dikansky noted there are favorable synergies with theacquisition, especially on the commercial level, that will help the companysexpansion into Asia, which currently only accounts for 6 percent of Naturexsales. We also gain a big plant in New Jersey, where we can really dothe same production in the United States that we currently have in Europe, hesaid. We believe the combination of PureWorld with our group ofcompanies will further enhance our collective efforts to become a leading playerin the botanical extracts and natural ingredients markets.

PureWorld would not comment on how the acquisition wouldaffect current personnel and operations. However, in a press statement, Qun YiZheng, Ph.D., president and chief operating officer of PureWorld, said, I amdelighted with the combination of PureWorld and Naturex and look forward toworking with Naturex to continue to build our business.

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