The Riverside Company Invests in Spanish Fragrances Business

The Riverside Company (Riverside), a global investment firm focused on the smaller end of the middle market, has announced that an affiliated European fund has invested in a controlling stake of Essential Compositions, a fast-growing developer and manufacturer of fragrances. The investment represents Riverside’s sixth deal in the specialty ingredients space in Europe.

Founded in Gandía, Spain, in 1980, Essential Compositions is dedicated to the creation and production of fragrances for end markets such as perfumery, personal care, air care, and home care. The company sells most of its products directly to 250 customers across more than 40 countries globally. The company provides a compelling value proposition to small and mid-sized companies, offering exceptional product quality, high-touch customer service and deep regulatory knowledge. In addition, it's R&D and new product development capabilities have emerged as a key strength, and the company today owns a catalogue of more than 20,000 registered formulations. Essential Compositions has significantly invested in quality control and assurance initiatives to ensure an extremely high level of product quality and customer service.

Karsten Langer, Managing Partner at Riverside Europe, commented: “We are delighted to secure our latest platform investment in the specialty ingredients space – an industry where we have a long track record and a global network of expertise, reinforcing our specialty ingredients super-thesis. We are attracted to this sector by positive growth trends in the overall Flavors & Fragrances industry, particularly among mid-sized and smaller companies.”

Following the investment, Riverside intends to enhance Essential Compositions’ commercial and R&D capabilities, further strengthening the company’s team of perfumers to support strong organic growth ambitions and international expansion. The firm will also seek to pursue a buy-and-build strategy in what is still a fragmented market with significant opportunities for consolidation.

“We are grateful for the trust of the Catalá family in choosing Riverside for this investment. Essential Compositions has an impressive range of innovative, high-quality products with a fantastic heritage and an enviable market position,” said Riverside Europe Partner Rafael Alvarez-Novoa. “During our partnership, we plan to help transition a family-run business to an elevated global company, while maintaining Essential Compositions’ authenticity, quality, innovation, creativity and customer-oriented culture. With our strong track record in this sector, we look forward to working with the Essential Compositions team, strengthening its commercial and marketing capabilities, especially in international markets, to drive growth in certain regions abroad and end-categories.”

Alberto Catalá, Chief Commercial Officer of Essential Compositions, commented: “Riverside’s deep Flavors & Fragrances sector experience and global resources, particularly in the U.S., EU and Asia, make the firm an ideal choice to help our organization continue its international development. Essential Compositions has been family-owned since its inception, so it was important to find a partner who would respect this heritage, while helping the company seize the current growth opportunities, particularly in international markets. My brothers and I will reinvest alongside Riverside, and we look forward to writing this new chapter with them.”

Riverside has been investing in the European ingredients market for around 15 years, with previous investments in companies like Capol (GER), MEC3 (ITA), E&A Scheer (NL), Euromed (SP) and HTBA (SP). Riverside also owns OnScent, a U.S. fragrance platform, and this experience helped the firm recognize the potential of Essential Compositions.

Working with Langer and Álvarez-Novoa on this transaction were Vice President Mattia Gattesco, Senior Associate Jaime García-Oliveros, Vice President Laura Palacio and Senior Operating Partner Fabio Pesiri.

Riverside was advised by A&O Shearman (Legal M&A) and KPMG (Commercial, Operational, Financial, Tax, Legal and Labour DD).

Working with Gonzalo Catalá (CTO, Essential Compositions), Alberto Catalá (CCO, Essential Compositions) and Miguel Catalá (Admin & Finance Director, Essential Compositions) were the wider Essential Compositions’ management team.

Essential Compositions was advised by Gómez Acebo & Pombo (Legal M&A) and Implica Corporate Finance (M&A advisor).