12.05.12
Royal DSM, a global life and material sciences company, has acquired Fortitech, Inc., a Schenectady, NY-based ingredient blend provider, for $634 million. The transaction is subject to customary conditions and is expected to close before the end of the year. The acquisition is the ninth in DSM’s Nutrition cluster since September 2010. Fortitech is a well-known entity in the food & beverage, infant nutrition and dietary supplement industries. The company offers customized solutions and works with a broad range of externally sourced nutrients and food ingredients. The company employs approximately 520 employees and has six production sites located in New York, California, Brazil, Malaysia, Denmark and Poland, with sales offices in China and Mexico. Net sales for 2013 were expected to be about $270 million with an EBITDA of about $70 million, including synergies and excluding exceptional items, resulting in an EV/EBITDA multiple of about nine. DSM has identified attractive cost synergies at about 10% of net sales, which will be fully realized by 2015, the company said. In addition, one-time synergies, primarily capital expenditure avoidance, are estimated at $70 million.
DSM said customers, especially those in the food and beverage industry, are increasingly looking for solutions providers offering a broad range of food ingredient blends that cover a more comprehensive portfolio of ingredients, sometimes even requesting the complete formula for a given product. DSM’s Human Nutrition and Health (HNH) pre-mix business is a channel to market primarily for its own nutritional ingredients.
“The acquisition of Fortitech is another very important step towards the implementation of DSM’s Nutrition strategy. It will help us to expand our value chain presence and to deliver more value to our customers,” said Leendert Staal, president and CEO of DSM Nutritional Products. “With Fortitech, DSM will be able to deliver customized food ingredient pre-mixes and blends to our customers while at the same time strengthening our international footprint.”
In other acquisition news, DSM reached an agreement to acquire Cargill’s cultures and enzymes business in an all-cash transaction for a total enterprise value of €85 million. The cultures and enzymes business of Cargill is a leading global manufacturer of cultures and enzymes for the dairy and meat industries with manufacturing operations in Wisconsin and France. The business generates net sales of about €45 million per year with approximately 200 employees.
The market for cultures and enzymes is valued at more than €1 billion, growing steadily at more than 5% per annum. Applications are primarily found in dairy products, which continue to appeal to consumers. The combination of the two businesses will allow DSM to achieve its ambition of becoming a tier one supplier of cultures and enzymes to the global dairy market and will greatly accelerate DSM’s growth plans for its business, which continues to benefit from consumer demand for more versatile dairy products.
DSM said customers, especially those in the food and beverage industry, are increasingly looking for solutions providers offering a broad range of food ingredient blends that cover a more comprehensive portfolio of ingredients, sometimes even requesting the complete formula for a given product. DSM’s Human Nutrition and Health (HNH) pre-mix business is a channel to market primarily for its own nutritional ingredients.
“The acquisition of Fortitech is another very important step towards the implementation of DSM’s Nutrition strategy. It will help us to expand our value chain presence and to deliver more value to our customers,” said Leendert Staal, president and CEO of DSM Nutritional Products. “With Fortitech, DSM will be able to deliver customized food ingredient pre-mixes and blends to our customers while at the same time strengthening our international footprint.”
In other acquisition news, DSM reached an agreement to acquire Cargill’s cultures and enzymes business in an all-cash transaction for a total enterprise value of €85 million. The cultures and enzymes business of Cargill is a leading global manufacturer of cultures and enzymes for the dairy and meat industries with manufacturing operations in Wisconsin and France. The business generates net sales of about €45 million per year with approximately 200 employees.
The market for cultures and enzymes is valued at more than €1 billion, growing steadily at more than 5% per annum. Applications are primarily found in dairy products, which continue to appeal to consumers. The combination of the two businesses will allow DSM to achieve its ambition of becoming a tier one supplier of cultures and enzymes to the global dairy market and will greatly accelerate DSM’s growth plans for its business, which continues to benefit from consumer demand for more versatile dairy products.
