August 6, 2009

Spanish multinational Natraceutical Group, a leading biotechnology corporation in the field of research and development on functional ingredients, active principles and nutritional supplements, and french multinational Naturex, a leading supplier of natural speciality ingredients to food, flavour, food supplements, pharmaceutical and cosmetic industries, formalized yesterday a memorandum of understanding for the merger of their ingredient activities, which is expected to be effective before the year end.

The transaction is planned to be structured by means of the integration of Natraceutical’s ingredients division into Naturex. This merger, triggered by two of the leading publicly traded companies in the ingredients industry, will create the number one independent company of natural specialty ingredients in the world.

With a fully complementary product portfolio that includes nutraceutical ingredients, flavouring, preservative and innovative extracts on Naturex’s side, and natural colours, fruit and vegetable powders, pectins, functional ingredients, yeasts and caffeine by Natraceutical’s ingredients division, the new company will combine the strengths of Naturex, strongly positioned in the USA, and those of Natraceutical, strongly positioned in Europe.

The resulting company will have production sites in Europe (France, Italy, Spain, Switzerland and United Kingdom), the USA, Morocco, Australia and Brazil and own sales offices in the USA, Europe and Asia, thus being ideally placed to take advantage of the ongoing growth and consolidation of this sector.

The company will operate under Naturex management, headed by Jacques Dikansky, chairman and CEO of the company.

After this operation, Naturex proforma sales will reach in 2009 around € 200 million and proforma EBITDA will represent around € 30 million, with a debt ratio close to 3.5 times Ebitda. After closing of this deal, and from an operational point of view, Natraceutical Group will focus its efforts in the full development of their nutritional supplements division in Europe, which the company markets exclusively in pharmacies under the brand name Forté Pharma.

According to Mr. Jacques Dikansky, Naturex’s chairman and CEO: “This operation represents a unique opportunity for Naturex to become the number one natural speciality ingredients company worldwide through the integration of the well-known and highly reputable companies forming Natraceutical’s ingredients division”.

To Mr. Xavier Adserà, Natraceutical Group’s chairman: “Under the current financial circumstances that are requiring companies to adapt their growth strategies to the new environment, we believe that uniting our strengths to Naturex’s will be highly value-creating for our businesses and shareholders”.

As exclusive M&A advisors to Naturex, Canec Inteational initiated and facilitated the agreement.