Israeli flavour and speciality ingredient producer Frutarom has signed an agreement to purchase a 100% stake in Flavours and Essences (F&E), a UK-based firm that develops and markets flavours and natural colours.

The $19.5m deal also includes a mechanism for future consideration based on F&E’s future business performance over a three-year period from the purchase date.

Financed through bank debt, the acquisition is reported to be in line with Frutarom’s growth strategy.

Frutarom Group president and CEO Ori Yehudai said: "This is another acquisition of activity in Frutarom’s core field, which will enable us to offer our customers a wider portfolio of solutions.

“This acquisition is further reinforcement for our growing activity in the UK wher Frutarom holds a leading position in flavours.

“Frutarom will drive at exploiting to the utmost the cross selling opportunities inherent in this acquisition and will work towards expanding the product portfolio to F&E’s existing customer base.

“In addition, Frutarom will take measures to achieve maximum commercial and operational efficiency from merging F&E’s activity with its own activity in the UK.”

Following the acquisition, F&E’s founding owners and managers will be retained by the company.

Founded in 1998, F&E is involved in the development, production and marketing of flavours and natural colours.

The company has a production facility and an R&D centre in Blackburn, a workforce of more than 40 employees, and a broad customer base in Europe.