Citi reiterates 'conviction buy' on Croda after Iberchem acquisition

Citi reiterated its ‘conviction buy’ rating and 7,400p price target on Croda International on Tuesday following its acquisition of Spanish fragrances and flavours company Iberchem.

The bank said the acquisition is a "game changer" for Croda, which is a specialty chemicals company.

"Established positions in rapidly growing Emerging Markets, speed-to-market focus and ability to cross sell products over Iberchem and now Croda platforms, support our expectations for low double-digit growth rates," it said.

"This is made possible with a combination of 8% per annum organic growth and synergies of 5% per annum on average over the next five years."

Citi said that this, coupled with a premium personal care recovery and Croda’s role in vaccines, lead it to reiterate its recommendation.

Croda agreed in November to buy Iberchem for €820m.