International Flavors & Fragrances Inc. (NYSE: IFF) said it has agreed to divest its Food Ingredients business to funds advised by CVC Capital Partners for approximately $4.3 billion, a move that lifted IFF shares about 2.5% in premarket trading on Friday.
The sale places the Food Ingredients unit at an enterprise value-to-EBITDA multiple of approximately 10x. Under the terms, IFF will keep a 10% minority equity interest in the business, a holding the company values at roughly $200 million, and will occupy a seat on the new company’s board.
According to IFF, the Food Ingredients segment generated nearly $3.1 billion in annual sales and delivered about $430 million of EBITDA in 2025. The company said it anticipates receiving net cash proceeds of approximately $3.8 billion at closing. Those proceeds are slated primarily for debt reduction, targeted share repurchases and reinvestment in growth opportunities.
"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," said Erik Fyrwald, chief executive officer of IFF.
Following the divestiture, IFF plans to concentrate on three core businesses - Taste, Scent, and Health & Biosciences - and has reiterated its full-year 2026 outlook. The company maintains guidance for 2026 sales in the range of $10.5 billion to $10.8 billion and adjusted operating EBITDA between $2.05 billion and $2.15 billion.
The transaction is the 13th divestiture completed by IFF in recent years and is part of a broader portfolio reshaping that has generated nearly $10 billion in gross proceeds. The company indicated the deal is expected to close by the end of the second quarter of 2027, subject to regulatory approvals and customary closing conditions.
J.P. Morgan Securities and BofA Securities are serving as IFF’s financial advisors on the transaction.
Market and corporate implications
The sale reduces IFF’s direct exposure to the Food Ingredients business while preserving a minority economic interest and governance representation. The expected net proceeds provide immediate capacity for balance-sheet repair through debt reduction, the possibility of shareholder returns via targeted repurchases, and funds for allocating to higher-growth or higher-margin investments within the remaining portfolio.
Timing and approvals
Closing remains contingent on obtaining regulatory approvals and satisfying customary closing conditions. IFF has set an anticipated close window through the end of the second quarter of 2027 but noted that the timeline depends on those approvals and closing requirements.