International Flavors & Fragrances Inc. (IFF), a flavors and fragrances company, said that it has inked a deal to sell its Food Ingredients business to the funds advised by CVC Capital Partners, a private markets manager, for around $4.3 billion. The transaction is expected to be closed by the end of the second quarter of 2027.
Erik Fyrwald, CEO of IFF, said: "This transaction represents an important strategic milestone in our ongoing portfolio optimization initiative, allowing us to further concentrate resources on our higher-growth, higher-margin segments."
Post transaction, IFF expects to receive net cash proceeds of around $3.8 billion. The company will utilize these proceeds to repay debt, to fund share repurchases, and to reinvest in high-return growth and high-return opportunities across the core portfolio.
The company expects the sale to be dilutive to its adjusted profit per share in the first 12 months post close, prior to the benefits from capital deployment and any actions to address stranded overhead costs.
Post transaction, IFF will retain around 10% minority equity interest in the business, or approximately $200 million.
In addition, the IFF has reaffirmed its annual guidance. For fiscal 2026, IFF still expects adjusted operating EBITDA of $2.05 billion to $2.15 billion, with sales of $10.5 billion to $10.8 billion.
IFF was up by 3.79% at $81 in the pre-market trade on the New York Stock Exchange.
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