Milwaukee-based Sensient Technologies Corp. announced it has agreed to acquire the natural color business of Lima, Peru-based natural food and ingredient maker GlobeNatural. The transaction is expected to close in the first quarter.
GlobeNatural is owned by Peruvian alpaca textile conglomerate Michell Group. It has been sourcing, manufacturing and exporting natural food ingredients and colors for more than 25 years. It sources and processes raw materials including cochineal derivatives, annatto derivatives, turmeric derivatives, anthocyanins and chlorophyll for natural coloring. They are used in food and beverage production worldwide.
Sensient manufactures colors, flavors and fragrances across its global footprint that are used to make foods and beverages, cosmetics, inkjet and specialty inks and colors, and specialty chemicals.
The acquired business will operate as Sensient Natural Colors Peru S.A.C. Sensient indicated the new business will help expand its reach in the growing natural foods segment.
“This acquisition is an important component of our ‘seed to shelf’ initiative in food colors. Eighty percent of food products launched globally use natural colors and coloring foodstuffs and we anticipate that this market will continue to grow. We will continue to innovate and expand our natural color supply chain portfolio,” said Paul Manning, chairman and chief executive officer of Sensient Technologies.
The cost of the acquisition and the integration plans have not yet been disclosed.
Sensient also Thursday reported its earnings for the fourth quarter of 2017.
Net income totaled $13.4 million, or 31 cents per diluted share, down 57 percent from $31.4 million, or 70 cents per share, in the fourth quarter of 2016.
Operating income was $47.4 billion in the quarter, up from $43.3 billion in the fourth quarter of 2016.
Revenue was $328.9 billion in the quarter, down from $330.2 billion in the same period a year ago.
For the full year, net income was $89.6 million, or $2.03 per diluted share, down from $126.3 million, or $2.84 per share, in 2016.
Full-year operating income was $167.8 million, down from $185.6 million in the prior year.
Sensient’s 2017 revenue was $1.4 billion, flat from 2016.
The company attributed the declines to the new federal tax law, as well as restructuring and other costs.
The tax impact reduced net income by $18.4 million, or 42 cents per share, for the fourth quarter and the full year.
The restructuring and other costs, which include mainly non-cash losses from two business divestitures in 2017, reduced operating income by $2.9 million, or 11 cents per share, in the fourth quarter and $48.1 million, or 96 cents per share, for the full year. In 2016, restructuring and other costs lowered its operating income by $6.2 million, or 9 cents per share, in the fourth quarter and $26.1 million, or 47 cents per share, in the full year.
