In a significant move for the chemical and ingredients industry, International Flavors & Fragrances (IFF) announced a definitive agreement to divest its food ingredients business to CVC Capital Partners.
A $4.3 Billion Strategic Move
The deal values the business at approximately 10 times (x) its 2025 EBITDA. Under the terms of the agreement, IFF will retain a 10% equity stake in the divested business and will continue to hold a seat on its board of directors.
The business, which specializes in texturants, emulsifiers, and plant-based solutions for multinational food and beverage customers, generated roughly $3.1 billion in revenue in 2025.
CEO Fyrwald: "Accelerating Innovation and Growth"
“This transaction represents an important strategic milestone in our ongoing portfolio optimization initiative,” said IFF CEO Erik Fyrwald. “By simplifying our portfolio, we will accelerate innovation, drive investment in research and development, and more effectively integrate our biotechnology and naturals capabilities across our global platform.”
Debt Reduction and Future Outlook
IFF expects to receive approximately $3.8 billion in net proceeds from the sale. The company plans to utilize these funds to:
Pay down debt and improve its balance sheet,
Execute share repurchases,
Reinvest in its remaining core segments.
Reaching the End of Divestiture Cycles
Industry analysts suggest that this sale likely concludes a major series of divestitures for the company. Jefferies analyst Laurence Alexander noted that IFF has shed 13 non-core businesses to date, generating nearly $10 billion in gross proceeds. “Additional significant portfolio realignment seems unlikely,” Alexander stated.
Looking ahead, IFF projects mid-single-digit annual revenue growth and high single-digit adjusted EBITDA growth for its remaining businesses, focusing heavily on enzymes, food biosciences, and fragrance encapsulation to drive long-term value.
