IFF has agreed to sell its Food Ingredients Business to funds advised by CVC Capital Partners, in a transaction valuing the business at approximately $4.3 billion.
The deal represents an enterprise value-to-EBITDA multiple of approximately 10x, reflecting the scale and profitability of the ingredients division.
IFF has chosen to retain an approximately 10% minority equity interest in the business, worth approximately $200 million, allowing continued collaboration between the two companies.
The retained stake will also allow IFF and its shareholders to participate in future value creation under the new ownership structure.
In 2025, the Food Ingredients business generated nearly $3.1 billion in annual sales and approximately $430 million of EBITDA, underlining its significant commercial scale.
IFF chief executive Erik Fyrwald said the deal represented a key strategic moment for the company’s ongoing portfolio transformation efforts.
“This transaction represents an important strategic milestone in our ongoing portfolio optimization initiative, allowing us to further concentrate resources on our higher-growth, higher-margin segments,” Fyrwald said.
He added that by retaining a minority stake, IFF would “continue to participate in the future upside of a strong business under dedicated ownership.”
Following completion, IFF will focus on three core businesses — Taste, Scent, and Health and Biosciences — each supported by long-term megatrends in health, wellbeing, and sustainability.
Including this transaction, IFF has now divested 13 non-core businesses, generating nearly $10 billion in gross proceeds to support balance sheet improvement and reinvestment.
IFF expects to receive net cash proceeds of approximately $3.8 billion at closing, after accounting for rolled-over equity, purchase price adjustments, carve-out costs, and taxes.
The company intends to use those proceeds primarily for debt reduction, targeted share repurchases as authorised by the Board of Directors, and reinvestment in high-return growth opportunities.
IFF is reiterating its full-year 2026 guidance, expecting sales in the range of $10.5 billion to $10.8 billion and adjusted operating EBITDA of $2.05 billion to $2.15 billion.
Lorne Somerville, managing partner and co-head of North American private equity at CVC, welcomed the acquisition, highlighting the resilience of the sector.
“The business has built a strong position in an attractive, resilient sector supported by long-term growth trends, including increasing global food consumption and demand for clean-label products,” Somerville said.
CVC partner James Christopoulos said the Food Ingredients management team had built a business with “meaningful scale and technical depth” and expressed confidence in the next phase of growth.
As part of the retained equity interest, IFF will also hold a board seat in the newly independent company going forward.
The transaction is expected to close by the end of the second quarter of 2027, subject to regulatory approvals and other customary closing conditions.
J.P. Morgan Securities and BofA Securities are acting as IFF’s financial advisers, with Skadden, Arps, Slate, Meagher and Flom serving as legal adviser on the deal.