IFF to sell food ingredients business to CVC for $4.3 billion

International Flavors & Fragrances (NYSE:IFF) agreed to sell its Food Ingredients division to funds advised by CVC Capital Partners in a transaction valuing the unit at approximately $4.3 billion.

The divestiture marks the latest step in a multi-year effort by the New York-based specialty ingredients giant to streamline operations and shore up its balance sheet.

The purchase price represents an enterprise value-to-EBITDA multiple of approximately 10 times.

Under the terms of the agreement, IFF will retain an approximate 10% minority equity interest in the business, valued at roughly $200 million.

This retention will allow the company to maintain ongoing commercial collaborations with the unit while enabling its shareholders to capture potential upside under CVC's management.

The divested unit is a major supplier of texturants, emulsifiers, and plant-based solutions to global food and beverage brands.

In 2025, the business generated nearly $3.1 billion in annual sales and approximately $430 million in EBITDA, accounting for a significant portion of IFF's historical top-line revenue but carrying lower margins than the company's core specialized portfolios.

While the sale will temporarily dilute adjusted earnings per share during the first 12 months post-closing, management stated that the long-term benefits of a streamlined portfolio and improved free cash flow generation outweigh the near-term earnings friction.

The company has already initiated an internal plan to eliminate stranded overhead costs stemming from the carve-out.

The transaction is expected to finalize by the end of the second quarter of 2027, contingent upon regulatory approvals and customary closing conditions.