News

International Flavors & Fragrances IFF has announced that it has entered into an agreement to sell its Pharma Solutions business to Roquette for an enterprise value of up to $2.85 billion.

France-based Roquette specializes in plant-based ingredients. IFF’s Pharma Solutions business is a well-established developer and manufacturer of pharmaceutical excipients and includes its Global Specialty Solutions business, which supports industrial and methyl cellulosic food applications.

The unit operates 10 research and development, and production sites across the globe, employing around 1100 people. It generated revenues of around $1 billion in 2023. The deal is expected to close in the first half of 2025, subject to customary closing conditions.

This move aligns with International Flavors’ strategy to optimize its portfolio. In December 2022, the company had announced a new strategic and financial vision, which among other things, consisted of a renewed growth-focus strategy, enhanced cost & productivity initiatives, and a redesigned operating model.

International Flavors intends to transform its operating model into a more customer-centric and market-backed one. It will conduct business in three core end markets, Food and Beverage, Home and Personal Care and Health.

IFF plans to step up its investment in high-return businesses such as Cosmetic Ingredients, Fine Fragrance, Flavors, Cultures & Food Enzymes, Health, Food Design, Fragrance Ingredients and Consumer Fragrance. To this end, the company has sold Microbial Control, a portion of Savory Solutions business and Flavor Specialty Ingredients businesses.

The company has also announced the sale of the Cosmetic Ingredients business to Clariant for $810 million. The unit includes the Lucas Meyers Cosmetics and IBR brands and operates six research and development and/or production sites globally. These endeavors will help International Flavors focus on its core business operations, strengthen its balance sheet and maximize shareholder return.

In the past year, International Flavors’ shares have fallen 1.9% in the past year compared with the industry’s 18.9% decline.

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Zacks Rank & Key Picks

International Flavors currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the Consumer Staples sector are Pilgrim's Pride PPC, Vital Farms VITL and e.l.f. Beauty, Inc. ELF. While PPC sports a Zacks Rank #1 (Strong Buy) at present, VITL and ELF have a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Vital Farms has an average trailing four-quarter earnings surprise of 155.4%. The Zacks Consensus Estimate for VITL’s fiscal 2024 earnings is pegged at 76 cents per share. The consensus estimate has moved 19% north in the past 60 days. The earnings estimate suggests year-over-year growth of 28.8%. Its shares gained 62.5% in the last year.

e.l.f. Beauty has an average trailing four-quarter earnings surprise of 69.2%. The Zacks Consensus Estimate for ELF’s fiscal 2024 earnings has moved 13% north in the past 60 days and is currently pegged at $3.04 per share. The estimate indicates an 83.1% increase from the prior-year reported figure. ELF shares have gained 157% in the past year.

The Zacks Consensus Estimate for Pilgrim's Pride’ fiscal 2024 earnings per share is pegged at $2.97, indicating growth of 75.7% from the prior-year actual. Earnings estimates have moved up 20% over the past 60 days. Shares of PPC have gained 48% in the past year.

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