DSM completes acquisition of Martek: Addition of new Nutrition growth platform

02-Mar-2011 - Netherlands

Royal DSM N.V. announced that it has successfully completed the acquisition of Martek Biosciences Corporation. The acquisition, announced on 21 December 2010, is the first major acquisition by DSM after its successful transformation into a Life Sciences and Materials Sciences company.

The acquisition, for a total consideration of about € 790 million (approximately US$ 1,087 million), is fully in line with DSM's strategy for its Nutrition cluster ("continued value growth") and adds a new growth platform for healthy and natural food ingredients for infant formula and other food and beverage applications, especially focused on Polyunsaturated Fatty Acids (PUFAs) such as microbial Omega-3 DHA (docosahexaenoic acid) and Omega-6 ARA (arachidonic acid).

The acquisition was structured as an all-cash tender offer for all the outstanding shares of Martek common stock, followed by a merger in which each share of Martek common stock not tendered in the offer, other than those as to which holders exercise appraisal rights under Delaware law and those held by DSM or Martek or their respective subsidiaries, was converted into the same cash per share price paid in the tender offer. Following completion of the merger, Martek became a wholly owned subsidiary of DSM.

Financial Highlights

The acquisition of Martek is expected to be immediately earnings per share accretive for DSM by € 0.15 to

€ 0.20 on a full year basis. It will contribute to DSM's progress towards achieving its profitability targets for 2013. It is expected that material synergies will be realized through expanded distribution, marketing and product development as well as other operational efficiencies. In addition, it will accelerate DSM's revenue growth.

Strategic Rationale

As a result of the acquisition, DSM will have extensive new opportunities in the infant nutrition segment as well as food, beverages and dietary supplements. The acquisition will create a strong platform for DSM to enter the fast growing Omega-3 and Omega-6 market through Martek's microbial DHA and ARA products. DSM will be able to utilize its global market reach, technology base and application skill capabilities to channel and accelerate the growth of Martek's product portfolio into other regions, applications and market segments beyond Martek's existing strong US-based position in infant formula ingredients and growing position in food and beverage and dietary supplement applications worldwide.

There is significant, broad based scientific evidence about the link between health and nutrition. PUFAs have been clinically proven to have a positive impact on human health and Martek is a leader in this field. Martek therefore represents an attractive strategic acquisition for DSM.

As a result of the scale and resources that DSM can bring to the already solid businesses of Martek, DSM instantly will become a leading player in the field of microbial PUFAs with the acquisition. Through this attractive growth segment the company expects to drive compelling financial performance for its shareholders.

DSM will also benefit from Martek's recent acquisition of Amerifit, an consumer business for branded dietary supplements with very specific health benefits, which it will be able to use as an additional marketing channel for both Martek as well as DSM ingredients.

Furthermore, Martek's algal and other microbial-based biotechnology platform and its robust biotechnology pipeline which complements DSM's own portfolio, is expected to deliver new nutritional and non-nutritional (industrial) growth opportunities in for instance biochemicals and biofuels.

https://www.bionity.com/en/news/131107/dsm-completes-acquisition-of-martek-addition-of-new-nutrition-growth-platform.html