International Flavors & Fragrances: Pharma Solutions Business Will Be Sold to Roquette

International Flavors & Fragrances announced the sale of the company's pharma solutions business to Roquette for $2.85 billion, which we view as a fair price for the business. We assume IFF will receive $2.4 billion in proceeds after taxes and fees. Having updated our model to incorporate the deal, we maintain our $130 fair value estimate. Our wide moat rating is also unchanged. The stock was down 2% at the time of writing. At current prices, we view IFF as significantly undervalued, with the stock trading in 4-star territory and less than 65% of our fair value estimate.