Boston, MA 04/01/2014 (wallstreetpr) – Balchem Corporation (NASDAQ:BCPC) has entered into a definitive agreement for the acquisition of chemical and Ingredient Company, SensoryEffects, a deal thought to be worth $567 million in cash. The acquisition comes at the back of SensoryEffects providing a guidance of $260 million for its revenues for this year before interest, tax, depreciation and amortization.
Terms of the deal
Balchem Corporation (NASDAQ:BCPC)’s purchase price represents 10 times SensoryEffects estimated EBITDA earnings for 2014 with the transaction expected to be accretive of Balchem’s earnings per share for this year. The acquisitions has not yet fully closed awaiting certain adjustments that are provided in the definitive agreement with substantial portion of the purchase price expected to be carried out in a debt financed deal. The transaction is expected to close in the next 40 days awaiting normal closing and customary conditions.
The acquisition of SensoryEffects will not affect its normal operation of the company as the management team will remain intact with the company’s food and beverage ingredient business being merged with Balchem’s Food and Nutrition segment. The merger of this two segments should be enough to strengthen the new entity’s market leadership position. The merger of the two companies will ensure customers get a broader range of various types of foods to choose from.
SensoryEffects mainly deals in customized technology driven food and beverage solutions, which include ingredients from bases and finished food systems. The company’s products are geared at enhancing vital sensory properties such as taste and texture. The company is also a leader in powder, solid and liquid systems as well as beverage delivery systems. SensoryEffects is a well-managed company having built a strong and broad customer base that has always resulted in a well-executed business enterprise.
Balchem Corporation (NASDAQ:BCPC) with the new acquisition will continue to be the leading provider of novel micro encapsulated lipid ingredient solutions with its diversified range of products, in the food and beverage solution industry. Over the years Balchem has always developed innovative products with human grade choline and continues to be the world leader for these essential nutrients.
The merger could not have come at a better time as both companies have stellar reputations in the industry being pioneers in providing quality products, always sure to address industry’s specialized needs.