IFF to Sell Food Ingredients Unit to CVC for $4.3 Billion
The flavor-and-fragrance maker will narrow its portfolio to three businesses after divesting a division that generated $3.1 billion in annual sales.
International Flavors & Fragrances (IFF) agreed to sell its Food Ingredients business to CVC Capital Partners for approximately $4.3 billion, the specialty-ingredients company said, marking the largest in a string of divestitures aimed at streamlining its portfolio.
The deal values the unit at roughly 10 times its 2025 EBITDA of about $430 million and includes an approximately 10 percent minority equity stake — valued at roughly $200 million — that IFF will retain in the carved-out business. Including the Food Ingredients sale, IFF has now divested 13 non-core businesses, generating nearly $10 billion in gross proceeds.
Food Ingredients had been the weakest performer in IFF's portfolio. The segment posted full-year 2024 revenue of $3.37 billion, down 3 percent on a comparable currency-neutral basis, with declines in every quarter: 6 percent in the first quarter, 4 percent in the second, 1 percent in the third and 2 percent in the fourth. Margins were volatile, ranging from a low of 10.8 percent in the third quarter to 12.6 percent in the first, and the full-year adjusted operating EBITDA margin settled at 12.1 percent — well below the company-wide average of 19.2 percent.
The divestiture leaves IFF centered on three businesses: Taste, Scent, and Health & Biosciences. Taste delivered accelerating currency-neutral growth through most of 2024, climbing from 11 percent in the first quarter to 15 percent in the third before easing to 12 percent in the fourth. Scent posted the strongest top-line gains, with currency-neutral growth of 16 percent in both the first and second quarters, though the pace slowed to 7 percent by year-end. Health & Biosciences was the most consistent contributor, with currency-neutral growth between 6 percent and 12 percent across all four quarters and EBITDA margins holding in a 24.7 percent to 27.2 percent range.
Profitability across the remaining segments showed pressure in the back half of the year. Scent's adjusted operating EBITDA margin fell 770 basis points over 2024, from 26.0 percent in the first quarter to 18.3 percent in the fourth. Taste margin erosion was steepest in the fourth quarter, when adjusted operating EBITDA margin dropped 560 basis points sequentially to 15.1 percent. Company-wide, fourth-quarter adjusted operating EBITDA of $471 million and a 17.0 percent margin represented the weakest quarter of the year.
For the full year, IFF reported net sales of $11.48 billion, flat on a reported basis but up 3 percent on a comparable basis and 6 percent on a currency-neutral basis versus 2023. Total adjusted operating EBITDA reached $2.21 billion.
Looking ahead, IFF set new long-term normalized targets of mid-single-digit revenue growth following the portfolio simplification. Pharma Solutions, which showed a sharp turnaround — swinging from a 7 percent currency-neutral decline in the first quarter to 12 percent growth in the fourth — is also being removed from the go-forward portfolio.
The transaction is expected to close in the first half of 2026, subject to regulatory approvals and customary closing conditions.