Key Takeaways:
International Flavors & Fragrances is nearing a deal to sell its food ingredients business to buyout firm CVC Capital Partners for more than $4 billion including debt, according to people familiar with the matter.
The transaction would mark IFF's latest move to streamline operations and improve margins, with the food ingredients unit representing the company's largest division by revenue. A sale at that price would rank among the biggest leveraged buyouts in the specialty chemicals sector this year.
IFF could announce the agreement in the coming days, the people said, cautioning that talks could still fall apart. The Wall Street Journal reported the exclusive earlier Thursday.
The divestiture comes as IFF, a New York-based maker of flavors, fragrances and cosmetic active ingredients, has been reshaping its portfolio under Chief Executive Officer Erik Fyrwald, who took the helm in 2023. The company has sold non-core assets and cut costs to focus on higher-margin segments such as fine fragrances and beauty ingredients.
CVC, one of Europe's largest private equity firms with more than 200 billion euros in assets under management, would gain a major supplier of ingredients used by packaged-food giants including Nestle and PepsiCo. The business produces savory flavors, sweeteners, texturants and other additives that form the backbone of processed foods.
The deal would require regulatory approvals in multiple jurisdictions, though the timeline for closing remains unclear. Neither IFF nor CVC responded to requests for comment.
A sale of the food ingredients unit would leave IFF more concentrated on its core flavors and fragrances operations, which carry higher margins and are less exposed to commodity price swings. The company's shares have gained about 1.3 percent in early trading following the report.
This article is for informational purposes only and does not constitute investment advice.
