Decatur, Ill.-based Archer Daniels Midland Company (ADM) will acquire WILD Flavors GmbH in an all-cash transaction valued at $3 billion (€2.3 billion), the move subject to regulatory approvals and expected to close at the end of the year. Wild Flavors, which is headquartered in Zug, Switzerland, is the world’s sixth largest flavor provider. ADM will combine Wild Flavors with its specialty ingredients business into a unit called Wild Flavors and Specialty Ingredients that’s expected to generate $2.5 billion in annual revenue.
“This acquisition expands ADM’s ability to serve customers’ evolving needs today and well into the future,” says ADM Chairman and CEO Patricia Woertz. “Natural flavor and ingredients is one of the largest and fastest-growing consumer trends in both developed and emerging markets, and WILD Flavors is the world’s leading provider of natural flavor systems to the food and beverage industry.”
Founded in Heidelberg, Germany in 1931 by Rudolf Wild, the father of Hans-Peter Wild, who owns 65 percent of the company, WILD Flavors has about 3,000 customers and annual sales estimated at $1 billion. ADM will pay €2.2 billion to WILD Flavors shareholders Hans-Peter Wild and funds affiliated with Kohlberg Kravis Roberts & Co. L.P., and assume approximately €0.1 billion of net debt.
“Together, ADM and WILD Flavors will create one of the leading flavor and specialty ingredient companies in the world, with sales approaching $2.5 billion and significant room to grow,” Woertz says. “WILD Flavors will be able to reach more customers with an expanded portfolio of innovative ingredients. And ADM, with our own sizeable specialty ingredient business, will have an enhanced platform for the commercialization of our higher-margin food and wellness ingredients.
“The addition of WILD Flavors balances and extends our value chain,” she continues. “It is consistent with our long-term strategy to diversify the crops we process and expand and diversify our product portfolio. It complements the ingredient, organic-growth investments we’ve recently made—including our Brazil protein complex and soluble-fiber expansion in China. And it is consistent with actions we’ve taken to dampen the volatility of our earnings mix and deliver on our commitment to profitable growth. The acquisition will meet our return objectives, with estimated cost and revenue synergies of €100 million by year three.”
Hans-Peter Wild, chairman of WILD Flavors GmbH, adds, “I am very pleased by ADM’s acquisition of WILD Flavors and the future business we will build together. WILD Flavor’s unique natural flavors strength and total systems approach will create a very strong and positive development platform within ADM for our customers as we continue to drive innovation in the food and beverage industry. With the strong financial resources, and expanded customer base, product offering and global footprint, I am confident WILD Flavors will be well-positioned for growth.”