Naturex to buy US extracts firm Pure World
rival Pure World for around $37 million (€30m), or $4.30 per share
in cash, reports Dominique Patton.
The acquisition, expected to close at the end of July, is a large one for the firm, which had anticipated buying two to three smaller businesses over a two-year period.
It will significantly increase Naturex's presence in the US market, which already accounts for half of its sales thanks to a previous acquisition.
Bedminster, New Jersey-based Pure World produces plant extracts for the cosmetic, food, pharmaceutical and nutraceutical industries, with 90 per cent of its sales coming from the US.
The deal makes Naturex one of the leading plant extract suppliers to the nutraceutical industry, after founding only in 1992.
The Avignon-based firm reported turnover of €34.8 million for 2004, a growth of 23.7 per cent on the prior year. Pure World generated $37 million (€30m)last year, although around $18 million came from a special product with a low margin, according to Jacques Dikansky, president of Naturex.
He said that the US firm, with smaller operating profits than Naturex, is starting to show better results, with EBITDA from this year's first quarterreaching $1.1 million, compared with $2.9 million for the whole of 2004.
"This year we have forecast a turnover of around $30 million but the special product will only account for about $6 million of that," he told NutraIngredients.com. "We think that 2005 will be the first with good profits."
"There are some really nice synergies. First on a commercial level, and we will use this to help our expansion into Asia. Secondly we gain a big plant in New Jersey, where we can really do the same production in the US that we currently have in Europe," said Dikansky.
Pure World can produce up to 3000 metric tons per year of herbal powders.
He added that Pure World makes some different products, including those purified using a patented oxidation process.
"In this business, no-one supplies all the big clients and no-one has all the speciality products. We now have two product portfolios and two client portfolios, which gives us a very important advantage," said Dikansky.
