International Flavors & Fragrances (IFF) is making a significant move by selling its Food Ingredients business to CVC Capital Partners for about $4.3 billion. This deal values the business at an attractive multiple, about ten times its earnings before interest, taxes, depreciation, and amortization (EBITDA).
Despite selling the business, IFF plans to keep a 10% stake, worth around $200 million. This will allow IFF to stay involved and benefit from future growth under CVC’s leadership. The deal is expected to close by mid-2027, pending regulatory approvals.
According to Erik Fyrwald, CEO of IFF, this sale is part of a larger strategy to streamline operations. By focusing on higher-margin and faster-growing segments, IFF aims to boost innovation, R&D investments, and better integrate biotechnological solutions. Fyrwald stated this change would enhance value for shareholders while encouraging long-term growth.
The Food Ingredients division is well-respected, generating nearly $3.1 billion in annual sales and around $430 million in EBITDA in 2025. It specializes in texturants and plant-based solutions for food and beverage companies. Fyrwald expressed confidence in CVC as the new owner, believing they’ll drive the business to new heights.
CVC’s leadership also views this acquisition positively. Lorne Somerville, managing partner at CVC, highlighted the Food Ingredients business’s strong market position and long-term growth trends. The demand for clean-label products is rising, offering substantial opportunities for expansion.
Post-transaction, IFF expects to net around $3.8 billion, which will be used strategically for debt reduction, share buybacks, and investing in core business areas. While the sale may initially impact earnings per share, IFF believes the long-term benefits will outweigh these short-term challenges.
Looking back, this decision reflects broader industry trends where companies seek to refine portfolios for better urban agility and strong market positions. As reported by McKinsey, nearly 70% of recent mergers and acquisitions aim to enhance innovation and market resilience.
For a more detailed view of corporate strategies during acquisitions, check out this analysis on Harvard Business Review.
