Turpaz: Mapping The Purchase Liabilities After Attractive Scent
The main article identified acquisition liabilities as Turpaz's real bottleneck. This follow-up maps what is already fixed, what is still EBITDA-linked, and why the Attractive Scent amendment made the liability stack clearer rather than lighter.
The Liability Map After Attractive Scent
The main article already established that Turpaz's operating engine improved, and that the bottleneck moved away from bank leverage toward the acquisition-obligation layer. This continuation isolates that map, because by the end of 2025 and the start of 2026 the key question is no longer only how much EBITDA the group can produce. The more important question is which part of the obligation stack is already fixed in amount and timing, which part still depends on the performance of acquired businesses, and which part still has to be funded over the next few years.
The first point is that this map does not sit on one line. The balance sheet includes purchase liabilities, but the financial-instruments note holds a separate layer of put options and contingent consideration. On top of that, management explicitly says current liabilities were also affected by the classification of put-option liabilities as short term, while non-current liabilities were affected by the accretion of their time value. Anyone who looks only at bank debt, or only at the purchase-liability line, misses the center of gravity.
| Layer | How it is measured | December 31, 2025 | What really matters |
|---|---|---|---|
| Purchase liabilities | Standard balance-sheet liability with a contractual payment schedule | $146.9 million on the balance sheet, $171.1 million in the contractual liquidity table | This is no longer a theoretical formula. It is a dated payment map, almost entirely inside five years |
| Put options and contingent consideration | Fair value based on future EBITDA and discounting | $139.7 million | This layer still moves with the performance of acquired businesses and with valuation assumptions |
| February 2026 Attractive Scent amendment | Fixed price instead of a Put/Call formula | €20.1 million for the remaining 31.4% | One important thread moved from a formula to a known number, but most of the price still has to be funded in cash |
| Parent-only liquidity | Cash and financial liabilities attributable to the parent company only | $108.4 million of cash and cash equivalents against $35.3 million of contractual financial liabilities | There is a solo liquidity cushion, but it is not the same map as the group's consolidated acquisition commitments |
The Layer That Is Already Locked As A Payment Schedule
The easiest layer to read is also the hardest to debate. By year-end 2025 Turpaz carried $12.4 million of short-term purchase liabilities and $134.5 million of long-term purchase liabilities on the balance sheet, together $146.9 million. But the contractual liquidity table pushes that number up to $171.1 million, with $12.4 million due within one year and $158.8 million due between one and five years. There is no meaningful tail beyond five years. That means the pressure is neither theoretical nor distant. It is concentrated exactly in the period when Turpaz has to prove that the 2024 and 2025 acquisition batch can turn into cash-generating scale.
That figure also matters in relation to the broader liability structure. Total contractual financial liabilities at group level stood at $441.3 million at year-end 2025, so purchase liabilities alone account for almost two fifths of the total. This is not a side note next to bank debt. It is already one of the main layers in the capital structure.
It is also important not to misread the category. This is not classic bank debt, so it does not always sit in the first headline for anyone screening net leverage. But in payment-map terms, it is a real obligation. If the acquired businesses fail to produce the expected cash, the fact that bank leverage looks comfortable will not solve the issue on its own.
The Layer That Still Moves With EBITDA
This is where the map becomes less intuitive. At year-end 2025, put options and contingent consideration stood at $139.7 million, up from $74.8 million at year-end 2024. The company states clearly that this layer is measured using the average EBITDA expected over the relevant agreement period, with a weighted annual discount rate of 7.7%. Its own sensitivity test shows that a 5% change in EBITDA changes the liability by about $3.2 million.
That is why this layer is different from the contractual purchase-liability bucket. It is not yet a closed number driven only by a dated schedule. It still lives on operating forecasts and on the actual performance of the acquired businesses. As long as those businesses keep delivering solid EBITDA, this can still be read as a fair economic cost of integration and acquisition. If one of them disappoints, investors may end up seeing both operating weakness and an unpleasant accounting move at the same time.
This is not a purely abstract footnote either. In its management discussion, Turpaz says explicitly that the rise in current liabilities was affected by the classification of put options as short term, while the rise in non-current liabilities was also affected by the accretion of their time value. At the same time, financing expense in 2025 increased mainly because of non-cash financing expense related to put options and interest on acquisition funding. In other words, the EBITDA-linked layer is already flowing through both the balance sheet and the income statement.
The correct reading is not to collapse the two layers into one generic "liability" number. $171.1 million of contractual purchase liabilities and $139.7 million of put-option and contingent liabilities are not the same thing, and they do not carry the same risk. The first mainly tests payment timing. The second tests how much of the acquisition story still depends on future business performance.
Attractive Scent: An Open Formula Turned Into A Fixed Price
This is where the most important map change happened. In July 2025 Turpaz bought 68.6% of Attractive Scent for €27.4 million, financed through long-term bank funding. The original agreement set a Put/Call structure on the remaining 31.4% in two parts: 10% could be exercised from one year after closing, at a price based on Attractive Scent's performance over the prior eight quarters and paid in Turpaz shares; another roughly 21.4% could be exercised from three years after closing, again based on the prior eight quarters, but payable in cash or in Turpaz shares at the sellers' choice.
That mechanism was canceled in February 2026. Instead of an open Put/Call formula, the parties signed an amendment under which Turpaz immediately bought the full remaining 31.4% for €20.1 million. The split was €7.3 million in Turpaz shares to the founders, €0.7 million in immediate cash to other sellers, and €12.1 million of deferred cash due on February 1, 2029.
This matters because it sharpens what really changed. On one hand, one transaction moved from an EBITDA-driven formula to a fixed and known price. That replaces part of the valuation-model uncertainty with a stated number. On the other hand, most of the consideration still has to be funded in cash. The equity portion covered only about 36% of the total price, while roughly 64% remained cash, almost all of it not immediate but deferred to 2029. This is higher clarity, not a full economic relief.
The private-placement report makes another point clear: the share component was handled through the issuance of 358,367 shares at NIS 75.24 per share, representing about 0.33% of issued share capital after allotment. In other words, the February 2026 solution did not lean on heavy dilution. It leaned mostly on deferred cash. That reduces near-term pressure, but it leaves a very visible funding checkpoint down the road.
| Deal structure | Before February 2026 | After February 2026 |
|---|---|---|
| What was being acquired | Remaining 31.4% through a Put/Call mechanism | Remaining 31.4% through an immediate buyout |
| What set the price | Performance over the prior 8 quarters | Fixed price of €20.1 million |
| Payment mode | Part in shares, part in cash or shares under the original terms | €7.3 million in shares, €0.7 million immediate cash, €12.1 million deferred cash |
| Main payment timing | One year and three years after July 2025 closing | February 1, 2029 for the deferred portion |
What Liquidity Solves, And What It Does Not
To Turpaz's credit, the solo picture is not stressed. At parent-company level, cash and cash equivalents reached $108.4 million at year-end 2025, of which $103.6 million sat in short-term deposits earning 4.55% to 4.65%. Against that, contractual financial liabilities attributable to the parent alone stood at $35.3 million, with $12.4 million due within one year.
That means the listed parent is not facing an immediate cash wall. But that is also exactly why it would be wrong to stop the analysis at the solo balance. The obligation map that now weighs on the thesis sits at group level: $171.1 million of contractual purchase liabilities, plus $139.7 million of put options and contingent consideration. At the same time, consolidated cash stood at $143.1 million at year-end 2025. There is liquidity, but it does not remove the central question: can the Taste and Fragrance engines acquired in 2024 and 2025 generate enough cash to fund the next few years without turning capital markets into a recurring part of the model again.
The 2025 cash-flow statement is a reminder of why that question is real. The group produced $40.7 million of operating cash flow, but relied on $150.3 million of financing cash flow while investment activity consumed $83.3 million. That is not a criticism of an aggressive acquisition year. It is a reminder of the type of year that just ended: a build year. The next test is whether 2026 and 2027 will look like harvest years rather than a continuation of the same funded buildout.
Bottom Line
After Attractive Scent, Turpaz's liability map is easier to read, but not easier to carry. One layer moved from an EBITDA formula to a fixed price with a known payment date. Another layer, amounting to $139.7 million, still moves with the performance of acquired companies. And above that, $171.1 million of contractual purchase liabilities is already arranged in a payment schedule concentrated almost entirely within five years.
So the right reading after February 2026 is not that "a liability disappeared." It is that "one liability became more readable." Turpaz has already shown that it knows how to buy. The next test is different: whether it can turn that acquisition layer into cash before the obligation stack starts growing faster than financial flexibility again.
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