Naturex, Natraceutical Merging Ingredient Operations

AVIGNON, France & VALENCIA, Spain Naturex is poised to become the largest global supplier of natural specialty ingredients, as the French company signed a memorandum of understanding with Natraceutical Group to acquire the Spanish firms ingredients division by the end of 2009. Following shareholder and regulatory approval, Natraceutical will hold between 38 and 40 percent of Naturex shares, becoming a relevant minority shareholder and board member of Naturex; SDG, the family-controlled holding company of Naturexs CEO Jacques Dikansky, will retain majority position.

The combined operation will have production sites throughout Europe, the United States, Morocco, Australia and Brazil, with sales offices in the United States, Europe and Asia. Naturexs Avignon headquarters are expected to be expanded to accommodate the integration of the Natraceutical activities by 2011. Its product portfolio will span nutraceutical ingredients, flavors/colors, functional ingredients, yeasts, preservatives and more.

Since its founding in 1992, Naturex has followed an aggressive growth and acquisition strategy to become a leading supplier of specialty and botanical ingredients, with proforma sales in 2009 expected to reach approximately US$287 million, following the integration of Natraceutical operations. Among the most recent Naturex acquisitions were Berkem in 2008 and Pure World Botanicals in 2005.

Jacques Dikansky, Naturexs chairman and CEO, was quoted by NutraIngredients.com as stating the combined operation will be up to 40 percent larger than its closest competitor, adding, This is important because you need to be bigger and bigger to meet clients increased needs. Customers are demanding more when it comes to research and development, clinical data, quality control, sales presence and you need to be large to deliver on this.

After offloading the ingredients business, Natraceutical will focus on its Food Supplement Division, which produces and markets dietary supplements sold throughout in Europe under the brand name of Forté Pharma. In a statement, Xavier Adsera, Natraceuticals chairman, said, Under the current financial circumstances that are requiring companies to adapt their growth strategies to the new environment, we believe that uniting our strengths to Naturexs will be highly value-creating for our businesses and shareholders. In his interview with NutraIngredients, Dikansky added while Natraceutical will hold a stake in Naturex, there would be no exclusivity agreement about supplying ingredients to the Forté Pharma brand.