FRUTAROM INDUSTRIES LTD.
EXPLANATORY NOTES TO THE CONDENSED CONSOLDIATED FINANCIAL INFORMATION
30 JUNE 2018
NOTE 4BUSINESS COMBINATIONS (continued):
c. Acquisition of Bremil (continued)
From the date it was
consolidated (May 30, 2018) with the financial statements of the Company through June 30, 2018, the acquired operations have yielded revenues of $ 4,327 thousands and net profit of $ 701 thousands (net of acquisition costs).
d. Acquisition of Mighty
October 18, 2017 Frutarom signed an agreement for the purchase of 60% of the shares of the Thai company The Mighty CO. LTD. (including the activity of Maharaj Food Co. Ltd. and Mighty International Co. Ltd., and hereinafter
collectively: Mighty) for approx. $ 12 million (approx. THB 393 million) (not including debt). All, according to value of approx. $ 20 million (net of debt) (approx. THB 655 million).
In the framework of the transaction Frutarom initially acquired 49% of Mighty and, subject to a number of conditions precedent and regulatory
approvals in Thailand, will raise its holdings to 60%.
The transaction includes a mechanism for future consideration subject to
Mightys future performance and a mutual option for the purchase of the balance of holdings in Mighty in two stages in periods beginning three years and five years from the date the transaction is completed, at a price based on Mightys
future business performance.
In February 2018, the conditions of the first part were met, hence the Company holds, as of the date of this
report 49% of the share capital of Mighty. According to the Company expectation, raising the holdings to 60% will be completed in several months. The transaction will be financed through bank debt and by the Company own means.
On a proforma basisassuming that the companies acquired in 2017 has been consolidated as from
1.1.2017 and the companies acquired in 2018 had been consolidated in the corresponding period in 20 17the H1 2017 sale would have amounted to approx. $ 708.0 million. This figure is based on unaudited data provided by the owners of the
acquired activities in accordance with the pre-acquisition accounting policies of the acquired activities.
On March 19,
2018 the Companys Board of Directors announced the distribution of dividend in the amount of NIS 0.50 per share, the dividend was paid to the shareholders on 7 of May, 2018 in the total amount of approx. $ 8,222 thousands.
NOTE 6SEGMENT REPORTING
management purposes, the Group is organized on a worldwide basis into two major operating activities: Flavour and Fine Ingredients. Another operating activity is Trade and Marketing.
Results of operation of the segments are being measured based on operating profit.