July 7, 2014

Archer Daniels Midland said Monday it had made an all-cash transaction offer to buy WILD Flavors for $3.1 billion.

The deal will allow ADM to access products from one of the world’s top food and beverage flavor systems producers, giving the company the capability to diversify into other markets in the food and beverage industry.

ADM said it will pay $2.99 billion (€2.2 billion) to WILD Flavors shareholders Dr. Hans-Peter Wild and funds affiliated with Kohlberg Kravis Roberts & Co. L.P. and assume €0.1 billion of net debt, pending regulatory approvals and is expected to close by year end.
Headquartered in Zug, Switzerland, WILD Flavors has a comprehensive suite of flavor systems and net revenues for 2014 estimated at $1.36 billion (€1 billion).

The company, which makes Capri Sun juice and other fruit juice concentrates and blends mixes and flavors, supplies food and beverage companies with natural ingredient flavor systems.

The companies together will be uniquely positioned to offer a broad range of customers—from the largest CPGs to fast-growing innovators—comprehensive systems-based solutions for food, beverage and personal care products.

“Together, ADM and WILD Flavors will create one of the leading flavor and specialty ingredient companies in the world, with sales approaching $2.5 billion and significant room to grow,” said Woertz. “WILD Flavors will be able to reach more customers with an expanded portfolio of innovative ingredients. And ADM, with our own sizeable specialty ingredient business, will have an enhanced platform for the commercialization of our higher-margin food and wellness ingredients.

ADM said the deal fit into its long-term strategy to diversify and expand its product portfolio, and complements recent investments it has made in organic-growth in Brazil and China.

‘It is consistent with actions we’ve taken to diminish the volatility of the company’s earnings mix and deliver on our commitment to profitable growth. The acquisition will meet our return objectives, with estimated cost and revenue synergies of $135.9 million (€100 million) by year three,” said Woertz.

ADM offers WILD Flavors strong financial resources and expanded customer base, product offering and the global footprint it needs to drive innovation and growth.

“We have tremendous respect for the culture and business that Dr. Wild has built,” Woertz said. “Given the strong brand WILD Flavors has with customers around the world, we intend to maintain the WILD Flavors name and grow the brand and the innovative, entrepreneurial culture that sustains it. We appreciate the difference in our business models, and will support continued success of the WILD Flavors model by establishing a new business unit called WILD Flavors and Specialty Ingredients. The new unit will include many of our specialty ingredients. We are also excited to work with the WILD Flavors team. With more than 400 scientists and applications specialists and a global sales force, they will bring exceptional expertise and new capabilities.”

Barclays is acting as financial advisor to ADM. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal advisor.