ADM Acquires Wild Flavors in a $3 Billion Deal

Archer Daniels Midland (ADM) the U.S. agribusiness agreed on Monday to buy Wild Flavors the natural ingredient business that is Swiss-German.

The price of the acquisition was $3 billion. It will give ADM an inroad into the health-conscious and flavoring food sectors.

ADM is one of the largest traders of grain in the world and a big food processor. The company said Monday that it was establishing a new unit in its business to be called Wild Flavors and Specialty Ingredients. The deal is expected to be closed before the end of 2014.

The acquisition of Wild Flavors is the first venture for ADM into the flavors market. Wild Flavors’ specialty was natural ingredients.

The acquisition comes at a time when consumers have shown increasing interest in foods made entirely with natural components.

ADM, which is based in Illinois, was amongst a bidder for Wild Things in May. Wild Flavors expected earnings of over 140 million euros.

The transaction also included net debt of 100 million euros. The price values Wild Flavors at 16.4 times above its core earnings, while others in the sector are 11 times above core earnings.

By three years following the acquisition, ADM has targeted more than 100 million euros in cost savings.

Wild Flavors has its headquarters in Zug, Switzerland with is management office based in Heidelberg-Eppelheim, Germany. It is the sixth largest supplier of flavors in the world. Hans Peter Wild the son of Rudolf Wild the founder owns 65% of Wild Flavors while KKR an equity firm owns 35%.

Wild also owns a separate company that is the Capri-Sun drink maker.

Other bidders attempting to purchase Wild Flavors included Ajinomoto the seasonings maker based in Japan, Tate and Lyle the food ingredients group from Britain, Givaudan the Swiss flavors and scents firm and EQT the private equity firm.

With the acquisition of Wild, which is advertising a new fruits range for the summer, ADM will gain access to a broad range of flavors, colors and seasonings from different natural sources and used in drinks and processed foods as well.



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