International Flavors & Fragrances Inc ( IFF ) said it has entered into a definitive agreement to sell its Pharma Solutions business unit to French plant-based ingredients Roquette for an enterprise value of up to $2.85 billion.

The acquisition represents an enterprise value to EBITDA multiple of approximately 13x.

IFF’s Pharma Solutions business is a developer and manufacturer of pharmaceutical excipients. It includes Global Specialty Solutions business supporting industrial and methyl cellulosic food applications. 

“An important next step in our portfolio optimization strategy, the sale of Pharma Solutions, along with other recent actions such as our dividend rightsizing, represents a significant step towards our commitment to reducing debt leverage to 3.0x or below,” said IFF CEO Erik Fyrwald.

“This also enables us to increase focus on the core drivers of long-term profitable growth and maximize value for our shareholders.”

Pharma Solutions operates 10 research and development and production sites globally, with about 1,100 employees, and generated approximately $1 billion revenue in 2023. 

IFF held $735 million in cash and equivalents as of December 31, 2023. The transaction is expected to be closed in the first half of 2025.

Price Action: IFF shares are trading higher by 0.52% at $84.25 in premarket on the last check Tuesday.