IFF to sell food ingredients business to CVC in US$4.3 billion deal as portfolio overhaul continues

International Flavors & Fragrances (IFF) has agreed to sell its Food Ingredients business to funds advised by CVC Capital Partners in a deal valued at approximately US$4.3 billion, marking the latest step in the company’s effort to streamline its portfolio and focus on higher-growth businesses.

IFF agreed to sell its Food Ingredients business to CVC Capital Partners in a transaction valued at approximately US$4.3 billion, while retaining a roughly 10% equity stake.
The Food Ingredients division generated nearly US$3.1 billion in sales and approximately US$430 million in EBITDA during 2025.
IFF expected to receive approximately US$3.8 billion in net cash proceeds, with debt reduction, share repurchases, and reinvestment identified as priorities.

The transaction, announced on May 29, will see IFF retain an approximately 10% minority equity interest in the business, valued at around US$200 million. The company said the retained stake would allow continued collaboration between the two businesses while giving IFF and its shareholders exposure to future value creation under CVC ownership.

The divestment represents a significant shift for IFF, which has spent the past several years simplifying its operations through a series of asset sales. Including the Food Ingredients transaction, the company reported that it has divested 13 non-core businesses, generating nearly US$10 billion in gross proceeds.

IFF CEO Erik Fyrwald described the sale as a key milestone in the company's transformation strategy. “This transaction represents an important strategic milestone in our ongoing portfolio optimization initiative, allowing us to further concentrate resources on our higher-growth, higher-margin segments,” he said. “By simplifying our portfolio to where we can create the greatest value, IFF will accelerate innovation, drive investment in R&D, and further integrate our biotechnology and naturals capabilities more effectively across our global platform.”

Following completion of the transaction, IFF will focus on three core business segments: Taste, Scent, and Health & Biosciences.

The Taste division provides flavor solutions for food and beverage manufacturers, while Scent encompasses fine fragrances, consumer fragrances, and fragrance ingredients. Health & Biosciences includes products such as probiotics, enzymes, cultures, and bioactive health ingredients.

IFF stated that concentrating on these businesses would improve cash flow generation, increase financial flexibility, and support long-term growth and profitability objectives.

The Food Ingredients business being sold is a major supplier of texturants, emulsifiers, plant-based solutions, and specialty ingredients used by multinational food and beverage companies. In 2025, the division generated nearly US$3.1 billion in annual sales and approximately US$430 million in EBITDA.

Fyrwald said the business had built strong customer relationships and market positions over many years and expressed confidence in its future under new ownership. “We are proud of the strong market positions, customer relationships, and talented team that have made Food Ingredients a strong business,” he said. “We are confident CVC is the right owner for its next chapter and that this transaction creates significant value for IFF shareholders while giving Food Ingredients an excellent platform for future success.”

For CVC, the acquisition adds another large food and ingredients asset to its global portfolio. Lorne Somerville, Managing Partner & Co-head of North American private equity at CVC, highlighted the long-term fundamentals supporting the business. “We are delighted to welcome IFF’s Food Ingredients business to CVC’s US portfolio,” he said. “The business has built a strong position in an attractive, resilient sector supported by long-term growth trends, including increasing global food consumption and demand for clean-label products.”

He added that the business’s global reach and technical capabilities created opportunities for future expansion.

James Christopoulos, Partner at CVC, said the investment firm planned to work closely with both the management team and IFF. “The Food Ingredients management team has done an exceptional job building a business with meaningful scale and technical depth,” he said. “We look forward to partnering with the team and with IFF as co-shareholders to accelerate the next phase of growth through scale and commercial expansion.”

IFF expects to receive approximately US$3.8 billion in net cash proceeds when the transaction closes. The company said the funds would primarily be used to reduce debt, support share repurchases authorized by its board, and fund investment opportunities across its remaining businesses.

The company acknowledged that the divestment is expected to be dilutive to adjusted earnings per share during the first 12 months after closing, before the impact of capital deployment and actions taken to address stranded overhead costs. However, IFF stated that it believed the benefits of a stronger balance sheet, improved cash generation, and a more focused business portfolio outweighed the short-term earnings impact.

IFF also reaffirmed its previously issued 2026 financial guidance, maintaining projected sales of between US$10.5 billion and US$10.8 billion and adjusted operating EBITDA of between US$2.05 billion and US$2.15 billion.

The transaction is expected to close by the end of the second quarter of 2027, subject to regulatory approvals and customary closing conditions. As part of its retained minority ownership, IFF will hold a board seat in the newly independent Food Ingredients business.