* No.4 scents & flavours maker branches out further into pet food
* Follows 2014 purchase of Diana Group
* Shares up 2.7 pct at 3-month high
* Analysts welcome price tag of 18 times EBITDA (Adds share gain, analyst comment)
By Ludwig Burger
FRANKFURT, Feb 1 (Reuters) - German scents and flavours maker Symrise has moved to expand its pet food business with the agreed purchase of U.S. group ADF/IDF for $900 million, pushing the buyer’s shares to a three-month high.
The transaction will be financed through debt and a rights offering, and it will also help the company expand its U.S. footprint, the company said in a statement late on Thursday.
ADF/IDF generates sales of $220 million a year and has 470 employees.
Symrise, the world’s fourth-largest fragrances and flavours (F&F) maker after Givaudan, IFF and unlisted Firmenich SA, in 2014 made a first foray into pet food ingredients with the acquisition of France’s Diana Group for $1.8 billion.
“With the acquisition, Symrise aims to broaden its activities in the fast growing pet food business and to expand its position in the attractive food nutrition market,” the company said.
Symrise shares jumped 2.7 percent to 74.5 euros at 0900 GMT - their highest since early November and the best performance on Germany’s midcap MDAX index.
Analysts at brokerage Bernstein said, given a price tag of 18 times earnings before interest, taxes, depreciation and amortisation (EBITDA), the target was cheaper than rival IFF’s recent purchase of Frutarom or Givaudan’s Naturex takeover.
“Symrise was likely the exclusive bidder for this asset and, in contrast to F&F peers, can extract sizable cost and revenue synergies,” they said, citing benefits from a combination with the Diana business. (Reporting by Ludwig Burger and Tom Sims; Editing by Dan Grebler and Michelle Martin)
