Glanbia plc has announced that it has agreed to acquire California-based Flavor Producers LLC for an initial consideration of $300m (€281m), with an additional payment of up to $55m (€51.6m) due, depending on Flavor’s financial performance in 2024.

Flavor Producers provides flavours and extracts to the food and beverage industries, with a focus on organic and natural ingredients. It will be integrated into Glanbia’s nutritional solutions division which includes the company’s dairy operations in the US.

Hugh McGuire, chief executive officer of Glanbia said the deal is an important step in the continued growth of Glanbia’s nutritional solutions business, adding that it “builds on our existing flavours capability and positions us well to capture long-term growth opportunities in the organic and natural flavours segments”.

Growth strategy

McGuire also said that mergers and acquisitions are an important part of Glanbia’s growth strategy.

The company is funding the purchase, which is anticipated to close before the end of the second quarter, from existing bank facilities and cash.

Glanbia is scheduled to hold its annual general meeting in Kilkenny on 1 May.