Frutarom said the move will help boost its development and production of food ingredients containing medicinal plant extracts, vitamins and minerals.
Adumim specializes in supplying natural ingredients to the nutraceuticals and functional food markets in both the Israeli and international markets.
One of Adumim's two main fields of activity is the development and production of food ingredients containing medicinal plant extracts.
The company's sales for 2006 totalled $5.5m (€4.043m).
Its product catalogue, which Frutarom will be adopting as part of the deal, includes FenuPure a concentrated and deodorized form of the plant Fenugreek, which is said to help people with diabetes control their blood sugar level.
The take-over will also come with Adumim's 45.8 per cent share capital in NutraLease, a company set up by Adumim founder Prof. Nissim Garti.
One of the products on offer from NutraLease is a nano-encapsulation technology which allows insoluble materials to be added to foods, beverages, medications and cosmetic products without adversely affecting their quality.
The technique helps to enhance the solubility of active ingredients, to increase their bio-availability and to control the release of active ingredients, including flavours and medications.
The move will also boost Frutarom's already growing research and development infrastructure and allow the group to benefit in the "development of fine ingredients and unique technology", the company said.
Frutarom president and chief executive Ori Yehudai said: "We are certain that this acquisition will also contribute to the continuing rapid and profitable growth of Frutarom and that it will create high value for our customers, our employees and our shareholders."
Yehudai did not rule out further acquisitions for the firm.
Final approval of the deal is subject to the approval of the Israeli Anti-Trust Commissioner.
Last month Frutarom signed an agreement to acquire fellow Israeli firm Raychan Food Industries, which was its third buy in the flavours arena this year.
Raychan was also Frutarom's thirteenth company buy-out in 15 years.
Frutarom, which has been going since 1933, last year reported sales of $287m (€211m), to which the flavours division contributed 65.1 per cent.
The remainder was generated by the fine ingredients division.