International Flavors & Fragrances (IFF) has agreed to sell its Food Ingredients business to private markets manager CVC Capital Partners, sharpening the ingredient supplier’s focus on scent, health, and biosciences. The divestiture is one of the largest ingredients-sector transactions in recent years.
The deal values the unit at approximately US$4.3 billion, an enterprise value-to-EBITDA multiple of around 10 times. IFF says the transaction will improve cash flow characteristics, offer greater financial flexibility, and create a stronger position to achieve its growth and profitability objectives.
“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,” says Erik Fyrwald, CEO of IFF.
IFF shares rose about 2% on Friday, the day of the announcement. The company has a market value of roughly US$19.9 billion, according to LSEG data.
The move to trim IFF’s portfolio to boost profitability closely mirrors Unilever’s recent decision to become a pure-play home and personal care (HPC) business. The portfolio-streamlining deals reflect the resilient consumer spending in the personal care and wellness industries.
IFF works to rebalance financials
Over the last several years, IFF has simplified its portfolio. The company is working to reduce debt.
Recently, IFF sold its Pharma Solutions business to Roquette for US$2.85 billion. Proceeds from the divestiture were used to fund a debt repurchase program after the company reported a US$1.02 billion net loss in Q1 2025, primarily due to a goodwill impairment charge.
Including the new transaction to CVC Capital Partners, IFF has divested 13 non-core businesses, generating nearly US$10 billion in gross proceeds. It says the money has supported balance sheet improvement and reinvestment in the company’s highest-return businesses.
The personal care and wellness industries are driving strategic business shifts.
Congruently, IFF reported a full-year net loss of US$374 million for 2025, driven largely by its US$1.15 billion write-down on the value of its Food Ingredients business. In 2025, the to-be-divested unit generated nearly US$3.1 billion in annual sales and approximately US$430 million of EBITDA.
The global player in flavors, fragrances, food ingredients, and health and biosciences says that with its refocus, each of its businesses is well-positioned for strong revenue and EBITDA growth opportunities.
IFF puts its scent division in a leading position for fine and consumer fragrance across personal and home care. It also calls Health & Biosciences an area with innovation-led solutions spanning probiotics, enzymes, cultures, and bioactive health ingredients.
With a more streamlined portfolio, the company predicts it will achieve mid-single-digit revenue growth and high-single-digit adjusted EBITDA growth, underpinned by its remaining business.
IFF expects to receive net cash proceeds of approximately US$3.8 billion at closing of the Food Ingredients divestment. It intends to prioritize use of proceeds toward debt reduction, targeted share repurchases, and reinvestment in high-return and growth opportunities.
The transaction is expected to dilute adjusted EPS in the first 12 months after closing, prior to realizing benefits from capital deployment and measures to address stranded overhead costs. IFF believes the strategic and financial benefits of a more focused portfolio, stronger balance sheet, and improved cash generation profile will outweigh the near-term earnings impact.
The company has implemented a plan to address the stranded overhead costs expected after the transaction and reiterates its previously communicated full-year 2026 guidance ranges.
The company expects full year 2026 sales to be in the range of US$10.5 billion to US$10.8 billion and full year 2026 adjusted operating EBITDA to be in the range of US$2.05 billion to US$2.15 billion.
Maintaining foothold in Food Ingredients
IFF will retain an approximately 10% minority equity interest in the Food Ingredients business. This permits collaboration and cooperation between IFF and Food Ingredients and allows the company and its shareholders to participate in future value creation under the new ownership.
“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,” says Fyrwald. 
IFF is selling its Food Ingredients business.
“Importantly, by retaining a minority stake in Food Ingredients, we will continue to participate in the future upside of a strong business under dedicated ownership. This transaction creates substantial value for shareholders while positioning IFF to drive sustained, profitable long-term growth.”
The deal is expected to close by the end of the second quarter of 2027, subject to requirements and customary closing conditions, including regulatory approvals. As part of the retained 10% equity interest, IFF will also hold a board seat in the new company.
Personal care becoming a growth priority
The IFF and CVC transaction follows a wider wave of portfolio reshaping across the consumer goods and ingredients sectors. As companies seek faster growth and improved profitability, many are divesting non-core assets and increasing investment in personal care and wellness.
Earlier this year, Unilever announced intentions to become a pure-play HPC business following an agreement to combine its Foods business with McCormick. Post-completion, Unilever will only operate across Beauty, Wellbeing, Personal Care, and Home Care.
Unilever has been slowly divesting its food portfolio and highlighting its personal care and home offerings over the past year. A large signifier of this was its SASSY campaign launched last year, which resulted in rolling revamps of heritage brands to cater to a younger and trend-driven audience.
The British-Dutch multinational said the transaction is another step to reshape Unilever into a simpler, sharper, higher-growth company. In the announcement to sell its Foods category, Unilever calls HPC highly attractive categories with fast-growing geographies and channels.
As it narrows its focus, Unilever is also ramping up investment in innovation to support long-term growth in personal care. Last week, the company unveiled its plans to invest US$270 million in a global innovation center in Connecticut, US, for its personal care, beauty, and well-being businesses. The center is set to open by spring 2029.
The move furthers the consumer goods company’s US$15 billion investment in the US market over the last ten years. The center will focus on improving Unilever’s R&D capabilities to enhance scaling and product development by using AI.
IFF’s divestiture and Unilever’s HPC pivot reflect one side of the industry’s transformation: a narrowing focus on personal care. On the other hand, companies are pursuing consolidation to build scale in attractive specialty ingredient markets. Tate & Lyle’s discussions with Ingredion highlight this parallel trend. 
Portfolio optimization remains a key priority for IFF.
Last month, British ingredient supplier Tate & Lyle confirmed that it was in talks with its US rival, Ingredion, over a potential takeover valued at £2.74 billion (US$3.7 billion).
Both companies are primarily known for their activity in the food and beverage (F&B) industry. However, the potential acquisition would combine their overlapping portfolios and could strengthen their presence in specialty ingredients — a category with significant relevance in cosmetics.
The companies have expanded their ingredient technologies into personal care and cosmetics in recent years as manufacturers increasingly seek multifunctional and bio-derived ingredients.
The personal care and wellness industries are driving strategic business shifts. The personal care and wellness industries are driving strategic business shifts. The personal care and wellness industries are driving strategic business shifts. IFF is selling its Food Ingredients business. IFF is selling its Food Ingredients business. IFF is selling its Food Ingredients business. Portfolio optimization remains a key priority for IFF. Portfolio optimization remains a key priority for IFF. Portfolio optimization remains a key priority for IFF.
