M&A activity underlines increased investment in active and biofunctional ingredients

By Simon Pitman

- Last updated on GMT

M&A activity underlines increased investment in active and biofunctional ingredients

Related tags Active cosmetics ingredients Cosmetics Middle east

Ashland today confirmed the acquisition of the Zeta Fraction biofunctional technology from rival ingredients player Akzo Nobel, a move that forms part of an industry-wide investment in advanced ingredients technology that has also included big players such as IFF and Givaudan.

Back in July Ashland announced its intention to acquire the technology as part of aims to enlarge its natural-based and sustainability ambitions, and the transaction has now been completed on schedule, but this move is put in the shadows by bigger recent deals that have seen IFF acquire Lucas Meyer​ in North America and. over in Europe, Givaudan's very recent confirmation that it will acquire Induchem​.

Although the financial terms of the transaction were not revealed, Ashland stated that the acquisition broadens its value-added portfolio in the personal care, pharmaceutical, food and beverage, and agriculture markets.

A rash of M&A activity in the ingredients arena

In recent months there have been a number acquisitions within the international ingredients space as businesses strive to expand and define their expertise in the active and bionfunctional ingredients area.

At the end of July, International Fragrance and Flavors announced the acquisition of Canada-based active ingredients specialist Lucas Meyer, a deal that got the thumbs up from investors who applauded IFF’s move into this area of the business.

In a similar move, Givaudan also confirmed the acquisition of 100% of the German specialty ingredients company Induchem yesterday, a move that gives the Swiss-based fragrance and flavors player an increased footprint in the global active ingredients category.

Both Givaudan and IFF will now be able to offer expanded ingredients portfolios under their global distribution capabilities, and additional investment on a larger scale is expected to expand those capabilities in the future.

Givaudan's active ingredients strategy

Givaudan’s acquisition continues its efforts to build its science-based active cosmetics ingredients business with the acquisition of Induchem.

The deal to acquire 100% of the shares is part of the cosmetics actives strategy in place at Givaudan, following the acquisition of Soliance which was completed last summer​.

The purchase brings a host of functional active cosmetics ingredients with proven efficacy results, as well as research expertise in fields such as biocatalysis, metagenomics, and biochemical synthesis.

IFF aims for further global reach

IFF has said that its deal will not only serve to increase its footprint in the cosmetics and personal care arena, but will also help to expand its global footprint.

The existing Lucas Meyer distribution operation serves clients in eight global regions: North America, South America, Europe, North Africa, South Africa, the Middle East, the Far East, and Oceania.

The company underwent significant expansion in 2013 with the addition of Canada-based Biophamracopae's portfolio of botanical ingredients and the acquisition of the Australia-based natural ingredients provider Southern Cross Botanicals.

Ashland taps into a highly refined extraction technology

Although Ashland's deal is on a smaller scale, the company says that its acquisition gives it capabilities in high level extraction technology that selectively isolates efficacious components from living plants and marine sources to produce a wide range of biofunctional ingredients.

The process works by targeting cellular fractions that are gently separated based on unique patented technology that preserves the value and functional aspects of the plant cells while still in a hydrated state.

This contrasts from conventional plant extraction processes that isolated botanical extracts from dry plants, using external solvents that can lead to limitations such as shelf life stability, making it harder to reproduce.

The technology targets issues with bioavailability

But as well as enhancing the extraction, the technology also tackles the pressing issue of bioavailability, which, when it comes to high demand ingredients and natural occurring cycles in plant availability, adds to supply pressures.

The acquisition of the technology has been driven by the company’s aim to integrate a comprehensive range of applications for the development of ingredients in-house.

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