Frutarom has announced that it has acquired from Paulson & Co. Inc., Enzymotec’s largest shareholder, approximately 9.2 percent of the ordinary shares of Enzymotec Ltd. for an aggregate amount of approximately US$24.2 million, reflecting a purchase price of US$11.5 per share and intends to make a tender offer for the entire company at the same price. 

Frutarom said it estimated that if all of Enzymotecs shareholders accepted the offer, the amount for purchasing the shares would be approximately US$213.43 million, which it intended to finance from its working capital and through bank financing.

Upon completion of the transaction, Frutarom holds approximately 19.13 percent of Enzymotec’s issued and outstanding shares at a total investment of approximately US$42.3 million, which reflects an average price of US$9.61 per share. 

Frutarom intends as soon as possible to make a full and special tender offer for the acquisition of Enzymotec’s entire issued and outstanding shares which it does not currently own for a price of US$11.5 per share. 

In addition, on August 23, 2017, Frutarom entered into a support agreement with Paulson, under which Paulson undertook, subject to conditions specified in the agreement, to support the tender offer and to tender to Frutarom the entire balance of the Enzymotec shares it holds, which constitutes approximately 9.2 percent of Enzymotec’s outstanding shares. 

Enzymotec develops, produces and markets innovative bio-active ingredients based on lipids to the food additive, health, medical foods and baby formula industries. Frutarom believes that some of Enzymotec’s know-how, research & development and products are of interest and are relevant to Frutarom’s core businesses.  

Ori Yehudai, President and CEO of Frutarom Group, said: “We took another significant step in entering an investment in Enzymotec after acquiring 9.2 percent of Enzymotec’s shares, approximately half the stake held by Paulson, its largest shareholder, who also agreed to support a full tender offer for Enzymotec shares which we intend to make shortly and to sell under that framework their remaining 9.2 percent stake. We view the investment in Enzymotec as an important long-term strategic investment for Frutarom assuming we can bring about a significant change in Enzymotec’s business strategy and its implementation.” 
   
Enzymotec develops, produces and markets innovative bioactive ingredients based on lipids to the food additive, health, medical foods and baby formula industries. In Frutarom’s estimation, some of Enzymotec’s know-how, research and development, and products also pose an interest and are relevant to Frutarom’s core businesses. Frutarom views its investment in Enzymotec as a long term and strategic investment should a significant shift occur in Enzymotec’s business strategy and its implementation. 

The news comes amid a busy expansion period for Frutarom. This week FoodIngredientsFirst reported that it was buying the Swiss-based flavor supplier Muehlehof Gewuerze for US$7m, while earlier in the month it had acquired UK company Flavours and Essences.