Appetite from private equity
Private equity (PE) investors are highly attracted to the flavours, fragrances and ingredients sector because of the strong performance of players in the sector, the attractive end market dynamics, and the differentiated product offerings. They also appreciate the defensible market position of these companies, as well as the fact that their added-value products are associated with strong levels of cash conversion.
PE firms also regularly establish new platform investments in the sector which are often the subject of ongoing buy-and-build strategies. Thanks to the increasing firepower of the PE market, investors can look at bringing together multiple players in the sector to create an enlarged entity, which in time will itself be an attractive acquisition target for the large global groups.