International Flavors & Fragrances Inc. (IFF) has entered into an agreement to sell its Food Ingredients business to funds advised by global private markets manager, CVC Capital Partners, in a transaction that values the business at approximately $6 billion (US$4.3 billion).
IFF’s Food Ingredients business manufactures and globally distributes a range of texturants, emulsifiers, plant-based solutions, and other specialty ingredients for food and beverage customers. The company has had an Australian presence since 2001, with its main manufacturing facility in Dandenong, Victoria.
IFF CEO, Erik Fyrwald, said the transaction represents an important strategic milestone in the company’s ongoing portfolio optimisation initiative – allowing concentration of resources in higher-growth, higher-margin segments.
“By simplifying our portfolio to where we can create the greatest value, IFF will accelerate innovation, drive investment in R&D, and further integrate our biotechnology and naturals capabilities more effectively across our global platform,” said Fyrwald.
“Importantly, by retaining a minority stake in Food Ingredients, we will continue to participate in the future upside of a strong business under dedicated ownership. This transaction creates substantial value for shareholders while positioning IFF to drive sustained, profitable long-term growth.
“We are proud of the strong market positions, customer relationships, and talented team that have made Food Ingredients a strong business. We are confident CVC is the right owner for its next chapter and that this transaction creates significant value for IFF shareholders while giving Food Ingredients an excellent platform for future success,” he said.
As part of the transaction, IFF has chosen to retain an approximately 10 per cent minority equity interest in the business, permitting continued collaboration and cooperation between IFF and Food Ingredients and allowing IFF and its shareholders to participate in future value creation under its new ownership.
The transaction is expected to close by the end of the second quarter of 2027, subject to regulatory approvals and closing conditions, with IFF receiving net cash proceeds of approximately $5.3 billion (US$3.8 billion). Alongside the retained equity interest, IFF will also hold a board seat in the new company.
CVC managing partner and co-head of North American private equity, Lorne Somerville, said the company was delighted to welcome IFF’s Food Ingredients business to CVC’s US portfolio.
“The business has built a strong position in an attractive, resilient sector supported by long-term growth trends, including increasing global food consumption and demand for clean-label products. Its global reach and proprietary technical capabilities provide a clear competitive advantage, and we see significant opportunity for continued growth,” said Somerville.
Upon completion of the Food Ingredients transaction, IFF will continue to operate its simplified portfolio, focused on:
- Taste – unique, technology-enabled flavor solutions for global food and beverage customers
- Scent – leading positions in fine fragrance, consumer fragrance across personal and home care categories, and fragrance ingredients
- Health & Biosciences – innovation-led solutions spanning probiotics, enzymes, cultures, and bioactive health ingredients
With a more streamlined portfolio, the company expects to be better positioned to accelerate innovation, improve execution, enhance free cash flow conversion, and deliver a stronger long-term financial profile.
The shift in the global food ingredients sphere follows US-based Ingredion making a conditional all-cash proposal in May to acquire British rival Tate & Lyle, in a deal that would value the company at approximately $5.2 billion (£2.74 billion).
