Archer Daniels Midland, the agribusiness giant is eyeing at Switzerland based private firm Wild Flavors. Wild Flavors is one of the largest suppliers of the food and beverage industry. ADM’s asking price to acquire Wild Flavor is $3.13 billion or 2.3 billion euros. It will be the all-cash deal.
ADM is one of the largest food processors and grain traders in the world. The deal was announced by the company on Monday. ADM announced a new business unit called Wild Flavors and Specialty Ingredients. The deal is expected to be completed by the end of the year.
With the acquisition of Wild Flavors, ADM steps into the flavors market. Wild Flavors specializes in natural ingredients. The decision of the acquisition was taken after observing increasing interest from consumers for food items that are made of natural ingredients.
Reuters was informed by sources that ADM is one of the private equity and strategic bidders for Wild Flavors and expected core earning for 2014 (EBITDA) of nearly 140 million Euros. The transaction includes total debt of 100 million Euros and values Wild Flavors 16 times more than its core earnings (EBITDA). With the acquisition, ADM wants to achieve 100 million Euros cost saving by the thirds year of the procurement.
Wild Flavors has its headquarter in Zug. The company’s management offices are in Heidelberg Eppelheim, Wild Flavors is the sixth largest flavor provider in the world. 65% stake of the company is owned by Hans Peter Wild, who is the son founder of Rudolf Wild. A private equity firm called KKR holds another 35% stake. Wild Flavor owns a drink making company which makes the drink Capri-Sun. The present deal, however, doesn’t include that company.
Experts believe ADM will now have access to a range of flavors, seasonings, colors and fruits because Wild Flavors has to advertise new stocks of summer fruit range on its website. As a result, the processed food and drinks industry could get a new boost.
Wild Flavors holds a very strong position across Europe. It is one of the esteemed European companies, reputed for processing foods and drinks from natural sources. With ADM investing in Wild, ADM’s business in North America could flourish.