IFF has announced that it has entered into an agreement to sell its Flavor Specialty Ingredients (FSI) business to Exponent, a leading UK-based private equity firm, for 220 million dollars in cash proceeds. FSI reports through IFF’s Scent division and is a leading manufacturer of synthetic and natural base aroma chemicals used in the flavor market. Cash proceeds from the transaction, net of taxes and expenses, will be used to reduce outstanding debt.

“Aligned with our strategy, we’re continuously evaluating our portfolio to identify opportunities to strengthen our financial profile,” said Frank Clyburn, chief executive officer, IFF. “The sale of FSI will improve our capital structure while allowing us to focus on our core businesses to enhance growth and returns. We appreciate the contributions of our FSI colleagues, who have shared our commitment to quality and customer service. We will work closely with Exponent to have a successful transition and look forward to FSI’s bright future.”

IFF’s FSI is a leading manufacturer of specialty base aromas with a broad range of more than 1,000 aroma chemicals and natural extracts, which provide inputs primarily to the flavor market. FSI includes four dedicated manufacturing and distribution facilities at Teesside and Hartlepool, United Kingdom; Cincinnati, United States; and Pucheng, China, with additional points of distribution in Mexico, Brazil, and Hong Kong. With approximately 340 employees, IFF’s FSI business serves more than 970 customers and generated more than 100 million dollars in revenue over the last 12 months.

IFF and Exponent expect to close the transaction by the end of Q3 2023, subject to customary closing conditions. Centerview Partners LLC acted as financial advisor to IFF, and Cravath, Swain & Moore LLP provided legal support.