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.
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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 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.