International Flavors & Fragrances Inc. (IFF) has a relatively new debt problem, but its solutions have quickly become old hat.

In late 2019, as larger competitors merged only to split off into more concise businesses, IFF looked to gain ground quickly by purchasing a major piece of a newly formed DuPont de Nemours Inc. (DD), nutrition and biosciences, for $26.2 billion.

The deal was viewed as a bold move by analysts — some of whom even went so far as to say that competitor Kerry Group plc missed out not winning the deal. But in other circles, investments bankers whispered over how difficult it would ultimately be to integrate the merger and how likely it was that IFF, too, may one day buckle under a massive debt load and a sprawling universe of product lines and need to explore breaking up.

This was seemingly not lost on IFF, and it moved quickly to shed businesses that it wouldn’t be the best owner of long-term.

Within six months of closing the DuPont deal, New York-based IFF sold a microbial business picked up in the acquisition to Lanxess AG for $1.3 billion.

Divestitures continued the next year, with the December 2022 sale of its savory solutions group for $900 million to PAI Partners SAS. The same month, the company promised more divestitures and operational improvements to reduce debt levels to 3 times Ebitda by 2024 from more than 4.5 times.

Cut to late 2023, and IFF’s leverage stands at about 4.3 times.

Meanwhile, the company is working to close a sale of its Lucas Meyer Cosmetics business to Clariant AG for $810 million and has put out books for its nearly $1 billion in sales pharma solutions division, according to people familiar with the matter.

Situation at a Glance

• Pharma had ~$203 million of adjusted Ebitda through Sept. 30
• Asset expected to pique PE interest
• Pharma exit pre-dates the company’s current management team

First-round bids were due the week of Nov. 17 for the pharma solutions business, one of the people said. A handful of parties, largely including sponsors and possibly one strategic, are thought to have submitted bids, the person added.

With Carl Icahn peeking over its shoulder and a debt downgrade seemingly looming, IFF appears to be a highly motivated seller.

Multiple expectations may once again require massaging, however, if it gets a deal done, and the divestiture train may not stop at pharma.