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Chemical Companies Last Week: Acquisitions and Spin-Offs

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Chemical Companies Last Week: Acquisitions and Spin-Offs PART 1 OF 3

International Flavors & Fragrances: Acquisition Complete

Acquisition of Fragrance Resources Complete

On January 17, 2017, International Flavors & Fragrances (IFF) announced that it has completed the acquisition of Fragrance Resources. The deal was announced on November 3, 2016. IFF didn’t disclose the financial terms of the agreement.

International Flavors &amp; Fragrances: Acquisition Complete

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The acquisition complements IFF’s 2020 vision to generate revenue of $500.0 million–$1.0 billion through acquisitions. Fragrance Resources is expected to add about $75.0 million in 2017 sales, and David Michael, acquired in October 2016, is expected to add another $85.0 million.

Fragrance Resources was founded in 1987 and has facilities in Germany, North America, France, and China.

IFF stock

IFF stock rose 1.3% and closed at $118.13 for the week ended January 20, 2017. But IFF was still trading 7.3% below its 100-day moving average of $127.48. IFF closed 21.5% higher than its 52-week low of $97.24 and 17.8% below its 52-week high of $143.64.

Analysts’ 12-month target price for IFF is $131.30, implying a potential return of 10.0% over its closing price on January 20, 2017.

The Materials Select Sector SPDR ETF (XLB), which holds 1.7% in IFF as of January 20, 2017, rose 0.40% for the week and closed at $51.09. The top holdings of this fund include Dow Chemical (DOW), DuPont (DD), and Monsanto (MON), with weights of 11.2%, 11.1%, and 8.3%, respectively, as of January 20, 2017.

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