Decatur, IL — Archer Daniels Midland Co. (ADM) has acquired WILD Flavors GmbH for $3.1 billion in cash, and is launching a flavor and specialty ingredients business unit with sales of almost $2.5 billion, the company reports.
Shareholders Dr. Hans-Peter Wild and funds affiliated with Kohlberg Kravis Roberts & Co., LP will receive almost $3 billion; ADM will assume net debt of $1.36 million, subject to regulatory approvals. The deal is expected to close by the end of 2014.
Citing consumer demand for natural flavors and ingredients as the impetus for the purchase, and noting the transaction will “balance and extend our value chain,” ADM Chairman and CEO Patricia Woertz explains: “Together ADM and WILD Flavors will become one of the leading flavor and specialty ingredient companies in the world, with specialty sales approaching $2.5 billion and significant room to grow. WILD will be able to reach more customers with an expanded portfolio of innovative ingredients, and ADM will have an enhanced platform for commercialization of our higher-margin food and wellness ingredients.”
She asserts the deal is consistent with the company’s efforts to dampen the volatility of its earnings and meet its commitment to profitable growth, and projects achieving cost and revenue synergies of $134 million within three years.
Further, Woertz says she intends to maintain and develop the WILD Flavors brand and culture, adding: “We appreciate the difference in our business models, and will support the continued success of the WILD Flavors model by establishing a new business unit called WILD Flavors and Specialty Ingredients. We’re excited to work with their more than 400 scientists and applications specialists and a global sales force, they will being exceptional expertise and new capabilities.”