p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 18.0px Arial}
p.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 18.0px Arial; color: 333333}
p.p3 {margin: 0.0px 0.0px 0.0px 0.0px; font: 18.0px Arial; color: 1155cc}
span.s1 {text-decoration: underline ; font-kerning: none; color: 1155cc; background-color: ffffff}
span.s2 {font-kerning: none}
span.s3 {font-kerning: none; background-color: ffffff}
span.s4 {text-decoration: underline ; font-kerning: none; background-color: ffffff}
span.s5 {text-decoration: underline ; font-kerning: none}
It’s not clear why Innophos might be exploring a sale at this time, although Bloomberg said several ingredients companies have recently been pursuing M&A activity as a way to increase returns in times of slow sales growth and volatile prices for raw materials.Innophos is not the only one thinking this way. DuPont is considering unloading its nutrijamp ferrous fumarate recalltion and biosciences business for an estimated $20 billion.If Innophos does move forward with a sale, it would be an interesting development for iron fumarate vsa company that was looking to boost growth by acquiring other businesses a lferrous bisglycinate uses in tamilittle more than two years ago. The plan in the first half of 2017 was to increase revenue 70% — to $1.25 billion — by 2022. The company wanted the share of its food, health and nutrition segment to increase from 52% of company sales then to 75%.Innophos started on that path, completing two acquisitions in 2017. It paid $125 million to buy Novel Ingredients in 2017. The deal was seen as a way for the cferrous fumarate obat apaompany to diversify its portfolio and position itself to benefit from new trends in the health, wellness and nutrition space. Innophos also acquired NutraGenesis, which markets nutraceutical ingredients, for $28 million.Despite these efforts, recent earnings reports haven’t been encouraging. In its second-quarter earnings report released on Aug. 6, Innophos posted a 10% sales decline — totaling $185 million — compared to the same period a year ago. The company blamed phasing out its nutrition trading business, a weakening of demand from customer destocking, lost business from Midwest floods and continued tariff effects.Kim Ann Mink, Innophos’ chairman, president and CEO, noted the company’s adjusted earnings before interest, tax, depreciation and amortization grew by 129 basis points during the second quarter. She said in the report that the company’s strategy had started to transform its growth profile, and the EBITDA growth came from “leveraging our improved mix, pricing power momentum, cost management and lower cost structure.”It’s hard to say which ingredient companies might want to acquire Innophos. Ingredion, IFF or Kerry Group all could be interested in Innophos’ mix of high-margin specialty grade ingredients and health-and-wellness ingredients. All three have been active acquirers in the recent past.Soon after taking the helm of Ingredion last summer, CEO Jim Zallie told Food Ingredients 1st the company was on the lookout for bolt-on deals — or larger and more transformational opportunities. IFF has been snapping up companies to help it become a more complete source for flavor and texture solutions, acquiring Frutarom, an Israel-based flavors, savory solutions and natural ingredients company for $7.1 billion last year. And Kerry has been buying diverse ingredients companies such as probiotics powerhouse Ganeden in 2017, Fleischmann’s Vinegar, savory flavor company Ariake USA, and the coatings and seasonings busineferrous gluconate drug interactionsss of Southeastern Mills North American last year.If a larger ingredient company does decide to make an offer, it could bring additional ideas and investment into play and boost shares higher than the relatively static position they’ve been in for the past few months. According to Simply Wall St, Innophos is a small cap stock at about $565 million. However, the site added, “it is big enough to catch the attention of professional investors.”
