The deal, announced today, will give LycoRed access to Buckton Scott's wide network of US supplement and functional food customers, helping the Israeli firm increase sales of its flagship product Lyc-O-Mato, and execute a long-term strategy of becoming a leading supplier of carotenoids for supplements and food.
"Since our strategy is sooner or later to get into the functional food business, they are selling to our long-term clientele," said Dr Zohar Nir, vice president of sales and marketing at LycoRed.
The Israeli company currently only markets lycopene in the US but it is planning to offer new products in the future, to become a leader in carotenoids, he told NutraIngredients.com.
"We are entering into other carotenoids, which we will supply alongside our lycopene, separately and in combination," Dr Nir revealed.
LycoRed was set up in 1995 by Tel Aviv-listed parent company Makhteshim - Agan Industries. Its remit was to develop markets for tomato-derived phytonutrients like lycopene, but also beta-carotene and phytosterols.
The company's business in the US is small but in Europe, its main market, it has grown sales volumes through acquisitions, particularly of premix firm Nutriblend in 2003.
It has recently announced an expansion of its European activities with the doubling of its premix capacity in the UK.
"We are still a growing group," said Dr Nir, declining to reveal any sales figures. "In the future our growth will come from natural sales growth and acquisitions," he added.
Buckton Scott Nutrition, based in Fairfield, New Jersey, is a subsidiary of the global ingredients supplier Buckton Scott Group, which is recognised for its strength in sourcing quality raw materials for nutritional products from across the world.
"It is a very elaborate sourcing machine that allows them to adjust to market trends," noted Dr Nir.
The acquisition will give LycoRed an advantage in the increasingly competitive nutritional ingredients market.
In a statement, Morris Zelkha, LycoRed president and CEO, said: "The dietary supplement and health food industries in the US are looking for 'one-stop-shop' opportunities for value-added ingredients. The expanded LycoRed group operation in the US will provide a complete service package, including a wider product range and the analytical and formulation capabilities of the LycoRed group."
"This acquisition is one of LycoRed's several strategic steps aimed at increasing our capabilities in the US and abroad."
LycoRed and the Buckton Scott group have been working together for a few years. Buckton Scott has distributed the vegetarian beta-carotene BetaCote 20VB, made by LycoRed subsidiary Biodar, in the US.
The integrated US business, to be known as LycoRed Corp, will be headquartered in New Jersey. An existing business relationship with the H.Reisman/Pharmachem organization will remain in place.
The LycoRed group is looking to consolidate all of its subsidiary companies under the LycoRed name over coming months.