01—Abstract
Summary
Summary of the 8-K filed March 19, 2024. Cited figures are marked; the original filing is the authoritative source.
International Flavors & Fragrances Inc. (IFF) announced on March 19, 2024 that it has entered into a definitive agreement to sell its Pharma Solutions business unit to French plant-based ingredients company Roquette for an enterprise value of up to $2.85 billiona, which the company says represents an enterprise value to EBITDA multiple of approximately 13x.
The Pharma Solutions business develops and manufactures pharmaceutical excipients and includes the Global Specialty Solutions business, which supports industrial and methyl cellulosic food applications. The perimeter is primarily made up of businesses within IFF's existing Pharma Solutions division, with some adjustments to align customers, businesses and the manufacturing footprint. According to the press release, Pharma Solutions operates 10 research and development and/or production sites globally, has approximately 1100 employees, and generated approximately $1 billionb of revenue in 2023.
The companies expect the transaction to close in the first half of 2025, subject to information and/or consultation requirements, customary closing conditions and regulatory approvals. J.P. Morgan Securities LLC acted as exclusive financial advisor to IFF, and Skadden, Arps, Slate, Meagher & Flom LLP acted as counsel.
IFF's CEO Erik Fyrwald described the sale as an important step in the company's portfolio optimization strategy. He said that, together with other recent actions such as its dividend rightsizing, the sale supports the company's commitment to reducing debt leverage to 3.0xc or below and allows it to focus on core drivers of long-term profitable growth.
02—Key points
Key Highlights
- Definitive agreement to sell the Pharma Solutions business unit to Roquette for an enterprise value of up to $2.85 billion
- Implied enterprise value to EBITDA multiple of approximately 13x, as stated in the press release
- Pharma Solutions develops and manufactures pharmaceutical excipients and includes the Global Specialty Solutions business
- Pharma Solutions has 10 R&D and/or production sites globally and approximately 1100 employees
- The business generated approximately $1 billion of revenue in 2023
- Companies expect the transaction to close in the first half of 2025, subject to regulatory approvals and other customary conditions
- CEO links the sale and dividend rightsizing to the commitment to reduce debt leverage to 3.0x or below
03—Questions
Frequently Asked Questions
What is IFF selling and to whom?
IFF is selling its Pharma Solutions business unit to Roquette Frères S.A., a French leader in plant-based ingredients. The business is a developer and manufacturer of pharmaceutical excipients and includes the Global Specialty Solutions business.
What is the value of the transaction?
The enterprise value is up to $2.85 billion, which the company says represents an enterprise value to EBITDA multiple of approximately 13x.
When is the sale expected to close?
IFF and Roquette expect the transaction to close in the first half of 2025, subject to applicable information and/or consultation requirements, customary closing conditions and regulatory approvals.
Why is IFF divesting Pharma Solutions?
CEO Erik Fyrwald said the sale is an important step in IFF's portfolio optimization strategy. Together with other recent actions such as dividend rightsizing, it supports the commitment to reduce debt leverage to 3.0x or below and lets the company focus on core drivers of long-term profitable growth and shareholder value.
How large is the business being sold?
According to the press release, Pharma Solutions operates 10 R&D and/or production sites globally, has approximately 1100 employees, and generated approximately $1 billion of revenue in 2023.
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