Best-Owner Mindset - IFF Divests Cosmetic Ingredients Business To Swiss Chemical Company Clariant For $810M

International Flavors & Fragrances Inc IFF said specialty chemical company Clariant AG CLZNF has agreed to acquire its Cosmetic Ingredients business unit for $810 million.

With about 195 employees, IFF's Cosmetic Ingredients business unit has more than 2,900 customers in over 80 countries and generated approximately $100 million in revenue in the last 12 months.

Coming under IFF's Scent division, IFF's Cosmetic Ingredients business unit develops, manufactures and markets ingredients for the cosmetic and personal care industry. It provides active ingredients, functional ingredients and delivery systems, primarily through the Lucas Meyer Cosmetics brand.

The cash proceeds from the sale will be used to reduce outstanding debt. The process is a part of IFF's portfolio optimization strategy, announced in the second-quarter FY23 earnings, to strengthen the capital structure.

"Aligned with our best-owner mindset, the proposed sale of our Cosmetic Ingredients business to Clariant will allow us to focus on our core businesses, maximizing growth and returns," said CEO Frank Clyburn.

The Cosmetic Ingredients business unit includes the Lucas Meyers Cosmetics and IBR brands and operates six research and development and/or production sites globally. The transaction is expected to close in the first quarter of 2024.

Price Action: IFF shares closed higher by 1.01% at $67.85 on Friday.