HAIFA, Israel, May 26, 2011 /PRNewswire-FirstCall/ —

– The Activitiy’s 2010 Sales Totaled Approx. US$ 24.3 M (Approx EUR 18.3
M)

– Frutarom Continues to Implement its Rapid Growth Strategy and Carry out
Strategic Acquisitions

– Continues to Establish its Position as a Leading Provider of Savory
Solutions

Frutarom Industries Ltd. (LSE: FRUTq, TASE: FRUT, OTC: FRUTF) announced
today that it has signed an agreement to acquire the Savory activity and
assets of Chr. Hansen Italy (Christian Hansen ITALIA S.p/a, hereunder: “Chr.
Hansen”) for a cash payment of approximately US$ 35.2 M (Euro 25 M). The
activity’s 2010 sales totaled approximately US$ 24.3 M (approximately Euro
18.3 M) and its operational margin came to 15%. The data are based on
unaudited documents provided by Chr. Hansen. The acquisition will be subject
to the approval of antitrust authorities. Frutarom estimates that the
acquisition will be finalized within the coming weeks.

The Savory activity of Chr. Hansen develops, produces and markets
innovative savory solutions (the non-sweet taste spectrum) including flavors,
seasoning compounds and functional ingredients for the food industry, with
special emphasis on processed meat and convenience food applications. The
acquired activity is a leader in savory solutions with an extensive customer
base comprised mainly of the leading Italian meat processors; the activity
also enjoys sales in Russia, Ukraine, Poland, Czech Republic and France. The
acquisition will provide Frutarom a substantial presence in Italy where the
Company’s local presence has been slight, and will serve as a platform on
which to expand into this important market. Included among the assets
purchased is a state-of-the-art, high-capacity plant located in Parma, Italy
that will enable Frutarom to increase its activities and to take advantage of
operational synergies with its existing savory activities in Europe. Also
included among the assets are innovative R&D laboratories. The acquired
activity employs some 45 employees augmenting the Frutarom workforce with
skill and experience at all levels, including in R&D and sales.

The acquired activity is highly synergetic with Frutarom’s current savory
competencies in Europe which have grown significantly in recent years with a
number of acquisitions, including the German companies Gewurzmuller and Nesse
(acquired in 2007 and 2006 respectively), the German Savory Functional
Systems activity of Chr. Hansen (acquired in 2009) along with the
acquisitions of EAFI and Rieber completed in early 2011. This acquisition is
additional step in establishing Frutarom’s leading European position as a
savory solution provider.

According to President and Chief Executive Officer of Frutarom, Ori
Yehudai: “This acquisition is a continuation of Frutarom’s rapid growth
strategy, and further solidifies its position as one of the top ten flavor
companies and as a leading global producer of savory solutions. The
acquisition will join Frutarom’s successful group of savory activities,
maximizing Frutarom’s existing synergies in the field. We will strive to take
advantage of the cross-selling opportunities offered by this acquisition and
to exploit to the fullest extent the commercial and operational synergies
across the relevant countries in order to reach optimal operational
efficiencies and maximal savings.”

“The acquired activity holds significant market share in the fields of
savory flavors and processed meat in Italy, and it will strengthen Frutarom’s
positioning among these customers while significantly increasing Frutarom’s
local presence and market share in this important market. The acquisition
considerably boosts both Frutarom’s technological capabilities and its
product offering to customers worldwide in the field of savory flavors and
functional products, as well as Frutarom’s extensive global customer base.”

Yehudai added, “Frutarom is highly experienced in making acquisitions, in
identifying synergies and pursuing the many cross-selling opportunities that
arise when combining the acquired activity with that of the Group. We are
confident that this acquisition will also contribute to Frutarom’s continued
fast and profitable growth and will create added value for our customers, our
employees and our shareholders.

Yehudai concluded by saying, “The acquisition of the Savory activity of
Chr. Hansen in Italy is Frutarom’s third acquisition this year. Frutarom is
continuously seeking additional strategic acquisitions of companies and
activities in its field. We are acting to further realize the potential of
our excellent acquisition pipeline, both in developed markets (such as the US
and Western Europe) and emerging target markets in Asia, Central and South
America, and Eastern Europe. We believe that our solid capital structure and
ability to produce cash flow from operating activities, together with the
support of the world’s leading banks, will enable us to further implement
additional acquisitions”.

About Frutarom:

Frutarom is a multinational company, operating in the global field of
flavors and specialty fine ingredients. Frutarom has significant production
and development centers on three continents and it markets and sells over
20,000 products in five continents to over 13,000 customers in more than 120
countries. Frutarom’s products are intended mainly for the food, beverage,
flavor, fragrance, pharmaceutical, nutraceutical, health food, functional
food, food additive, and cosmetic industries.

Frutarom, which employs roughly 1,500 employees worldwide, operates
through two main divisions:

– The Flavors Division, which develops, produces and markets flavor
compounds and food systems.

– The Specialty Fine Ingredients Division, which develops, produces and
markets natural flavor extracts, natural functional food ingredients, natural
pharmaceutical/nutraceutical extracts, specialty essential oils and citrus
products, and aroma chemicals.

Frutarom’s products are produced at its plants in the United States,
England, Switzerland, Germany, Israel, China, and Turkey. The Company’s
global marketing organization includes branches in Israel, the United States,
England, Switzerland, Germany, Belgium, Holland, Denmark, France, Hungary,
Romania, Russia, Ukraine, Kazakhstan, Belarus, Turkey, Brazil, Mexico, Costa
Rica, China, Japan, Hong Kong, India and Indonesia. The Company also works
through local agents and distributors worldwide.

    For further information, visit our website: http://www.frutarom.com.

    Company Contact:
    Ori Yehudai, President & CEO
    Frutarom Ltd.
    Tel: +97299603800
    Email: oyehudai@frutarom.com

SOURCE Frutarom Industries Ltd