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St. Louis-based Performance Chemicals & Ingredients Co. (dba SensoryEffects), a leader in food and beverage ingredient systems, has entered into a definitive agreement to sell all of its outstanding shares to Balchem Corp., a human and animal health and wellness company in Hampton, N.Y. The transaction is subject to certain regulatory approvals and customary closing conditions. The purchase price is $567 million and is expected to close within the next 40 days.
SensoryEffects expects to have 2014 revenues of approximately $260 million and EBITDA (earnings before interest, taxes, depreciation and amortization) of approximately $53 million. The acquisition purchase price reflects a multiple of 10.7 times estimated 2014 EBITDA, excluding any deal-related costs and synergies.
SensoryEffects’ management team will continue to lead the food and beverage business. Balchem’s Food, Pharma and Nutrition business unit will be merged with SensoryEffects, creating the largest business segment in Balchem, with sales of more than $300 million.
SensoryEffects provides customized, technology-driven food and beverage solutions including ingredients, bases and finished food systems for leading multinational and emerging high-growth food and beverage customers. Balchem is a leader in human and animal health nutrition with value-added functional and solution-based ingredients for a broad spectrum of end markets, including commercial bakers and confectioners.
“We are excited to enter into this agreement with Balchem, who is an ideal partner for us, strengthening our position by merging our business with its encapsulation and functional choline ingredients,” says Charles A. Nicolais, chairman, president and CEO of SensoryEffects. “Balchem is synonymous with the best in animal and human nutrition, and together, we look forward to delivering new and innovative ingredient solutions to our customers in the food and beverage industry.”
“We have found a unique complement for Balchem with SensoryEffects,” says Dino A. Ross, chairman, president and CEO of Balchem. “Both of our companies have built stellar reputations for quality products that address the food and beverage industry’s most specialized needs. The prospects of a combined Balchem and SensoryEffects will canvass an even broader range of food customers. The united experience and technical problem solving capabilities will ultimately make our company one of the most comprehensive food ingredient solution companies globally.”