Frutarom is a good strategic investment and improves IFF's growth prospects and margin profile. Frutarom's customer mix includes faster-growing, small, innovative companies that offer higher-margin products. The acquisition also gives IFF entry into natural coloring and health-based ingredients, primarily for food and beverages, to a lesser degree for pharmaceutical and personal care products. These product categories have better growth prospects than the company's core flavor and fragrances offerings since they resonate better with today's health-conscious consumer. They also provide more opportunity for innovation-based growth because Frutarom's small to mid-sized customers tend to invest more in R&D for new flavors and ingredients solutions, which drives higher growth and offsets the weakness of their larger multinational customers. The size of the acquisition
