DSM to acquire Ocean Nutrition Canada to expand its Nutritional Lipids growth platform
* DSM (NYSE Euronext: DSM KON) to acquire Ocean Nutrition Canada in an all-
cash transaction
* Total enterprise value CAD 540 million (about €420 million)
* Ocean Nutrition Canada expected 2012 Net Sales: approximately CAD 190
million with EBITDA of CAD 55-60 million
* Ocean Nutrition Canada is a leader in fish-oil derived Omega-3 fatty acids
for dietary supplements, highly complementary to DSM's successful Martek
acquisition in 2011
* Strong strategic fit; acquisition will strengthen and complement DSM's
global Nutritional Lipids growth platform, based on healthy, polyunsaturated
fatty acids (PUFAs)
* Acquisition extends DSM's portfolio of omega-3 fatty acids reaching a wide
range of different market segments and applications
* Value creating acquisition; EPS accretive as from 2013
Royal DSM, the global Life Sciences and Materials Sciences company, announced
today that it has entered into a definitive agreement with Clearwater Fine Foods
and funds managed by Richardson Capital to acquire Ocean Nutrition Canada for a
total enterprise value of CAD 540 million. Subject to customary conditions, the
transaction is expected to close in H2 2012.
Ocean Nutrition Canada is a Canada-based supplier of fish-oil derived Omega-3
fatty acids (EPA and DHA) to the dietary supplement and food and beverage
markets. The company is headquartered in Halifax (Nova Scotia, Canada) with
approximately 415 employees. Ocean Nutrition Canada, founded in 1997, has
production sites in Canada, the United States and Peru. Every day over 21
million servings of its MEG-3(®) product line are consumed in supplements and
foods and beverages across the world. Net Sales for 2012 are expected at
approximately CAD 190 million with an EBITDA of CAD 55-60 million. The average
annual growth of the company over the past 5 years in local currency amounted to
nearly 20%.
Strategic rationale
Supported by a growing body of scientific evidence, healthy PUFAs such as omega-
3 fatty acids have been shown to provide significant health benefits supporting,
for example, brain health, eye and cardiovascular health throughout life.
Leading experts worldwide have noted that healthy PUFAs such as DHA, EPA and ARA
are important nutrients for health throughout all stages of life, yet many
consumers do not include enough in their daily diets. The rapidly growing
nutritional lipids category is at an early stage yet well established and is
based on strong science, offering significant growth opportunities across a
broad range of market segments and applications.
Ocean Nutrition Canada is the world's largest supplier of fish-derived Omega-3
fatty acids to the dietary supplement and food and beverage markets. Ocean
Nutrition Canada's fish derived Omega-3 products are highly complementary to
DSM's microbial DHA and ARA products as they address different customer needs
and reach different market segments.
Given the very different value proposition and pricing of fish oil derived PUFAs
(naturally occurring mixtures of DHA and EPA) compared to microbial derived
PUFAs (DHA and ARA), these products do not compete. The acquisition of Ocean
Nutrition Canada extends DSM's portfolio of Omega-3 fatty acids reaching a wide
range of different market segments and applications.
The acquisition will allow DSM to strengthen and complement its newly
established, global Nutritional Lipids growth platform. It will strengthen DSM's
position in the North American dietary supplement market by adding fish oil
derived omega-3 fatty acids to its portfolio and it will allow DSM to further
leverage its global infrastructure to expand Ocean Nutrition Canada's sales in
dietary supplement markets outside North America and in the food and beverage
markets worldwide. In addition, by leveraging forms, encapsulation and
emulsification technologies, the range of applications and products can be
expanded.
DSM expects the transaction to be EPS accretive as from 2013. The acquisition is
expected to accelerate revenue growth through material revenue synergies with
expanded distribution, marketing and product development. Customary operational
efficiencies will also be realized in the integration process.
The acquisition of Ocean Nutrition Canada is the fifth acquisition in the
Nutrition cluster since DSM in September 2010 announced its corporate strategy
DSM in Motion: driving focused growth. These acquisitions form an integral part
of DSM's strategy for its Nutrition cluster and will contribute to the current
and future growth of DSM's attractive portfolio in health, nutrition and
materials. The resulting stronger, more stable growth and profitability will
enable DSM to continue to deliver shareholder value.
Feike Sijbesma, CEO and Chairman of the DSM Managing Board, said: "After our
successful acquisition of Martek in 2011, the acquisition of Ocean Nutrition
Canada is the logical next step in developing our Nutritional Lipids into a
major growth platform for our Nutrition cluster. Our science-based knowledge and
expertise in nutritional ingredients will help to further grow Ocean Nutrition
Canada's business as part of DSM. This acquisition fully fits DSM's strategy as
we continue to create value for all stakeholders by providing innovative,
sustainable solutions to the world's greatest challenges."
Stephan Tanda, member of the DSM Managing Board and responsible for the
Nutrition cluster, commented: "We look forward to welcoming the very capable
team of Ocean Nutrition Canada employees to DSM and to developing this exciting
opportunity together. PUFAs have developed into a major nutrition ingredient
category, based on solid science and well recognized health benefits, driving
consistently high market growth rates. By combining Ocean Nutrition Canada's
strength in fish oil derived Omega-3s with our unique global infrastructure and
broad access to dietary supplement and food & beverage markets, we will be able
to provide our customers around the world with market leading value and a
steadily widening range of applications."
Martin Jamieson, President and CEO of Ocean Nutrition Canada, said: "ONC is a
truly remarkable enterprise. From its founding in 1997 through to the present
day, our Nova Scotia based company has led one of the most attractive growth
segments of the global nutrition industry. In 15 short years the company has
grown from start-up to global leader in fish oil derived Omega 3 and this
acquisition by DSM, a leading international business with much greater scale and
reach, is the logical next step in our evolution. Our success could not have
been achieved without the talent and dedication of our 400 plus employees, the
support and vision of our shareholders and the strong and well established
relationships that the company has developed in the communities in which we
operate. DSM is the right partner to guide our next phase of development and
they will be great stewards of Ocean Nutrition going forward. We are delighted
that they appropriately recognize the value of ONC's worldwide market success,
our leading edge technology platform and especially our immensely talented
workforce."
Conference calls
Today DSM will hold a conference call for the media from 08.00 AM - 08.30 AM CET
(+31 (0)10 29 44 215 or +44 (0) 203 365 3207) and a conference call for
investors and analysts from 09.00 AM - 10.00 AM CET (+31 (0)10 29 44 271 or +44
(0) 203 365 3207). Also, more information can be found in the presentation that
can be found on DSM's corporate website.
Ocean Nutrition Canada
Ocean Nutrition Canada is the world's largest supplier of Omega-3 EPA/DHA
ingredients to the dietary supplement and food manufacturing markets. Ocean
Nutrition Canada also has the largest privately owned marine research and
development facility in North America. Its MEG-3(®) branded ingredients offer
high quality, odor-free, tasteless Omega-3 EPA/DHA from fish oil - the best
source of Omega-3 EPA/DHA. By using clean, reliable, sustainable resources,
Ocean Nutrition Canada provides its customers a competitive edge in the rapidly
growing Omega-3 EPA/DHA market. Ocean Nutrition Canada customers also enjoy
specialized services from critical technical and regulatory support to
innovative R&D and global marketing support. Ocean Nutrition Canada is based in
Nova Scotia, Canada.
DSM - Bright Science. Brighter Living.(TM)
Royal DSM is a global science-based company active in health, nutrition and
materials. By connecting its unique competences in Life Sciences and Materials
Sciences DSM is driving economic prosperity, environmental progress and social
advances to create sustainable value for all stakeholders. DSM delivers
innovative solutions that nourish, protect and improve performance in global
markets such as food and dietary supplements, personal care, feed,
pharmaceuticals, medical devices, automotive, paints, electrical and
electronics, life protection, alternative energy and bio-based materials. DSM's
22,000 employees deliver annual net sales of around €9 billion. The company is
listed on NYSE Euronext. More information can be found at www.dsm.com.
For more information:
DSM Corporate Communications DSM Investor Relations
Herman Betten Hans Vossen
tel. +31 (0) 45 5782017Â Â Â Â Â Â Â Â Â Â Â Â tel. +31 (0) 45 5782864
fax +31 (0) 45 5740680Â Â Â Â Â Â Â Â Â Â Â Â fax +31 (0) 10 4590275
e-mail media.relations@dsm.com e-mail investor.relations@dsm.com
Ocean Nutrition Canada
Martin Jamieson
Tel. +1 (902) 480-3255
e-mail mjamieson@ocean-nutrition.com
Press release-pdf:
http://hugin.info/130663/R/1613186/513650.pdf
IR presentation-pdf:
http://hugin.info/130663/R/1613186/513651.pdf
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Source: DSM N.V. via Thomson Reuters ONE
[HUG#1613186]