DSM completes acquisition of Ocean Nutrition Canada
Royal DSM, the global Life Sciences and Materials Sciences company, announced today that it has successfully completed the acquisition of Ocean Nutrition Canada, the leading global provider of fish-oil derived nutritional products to the dietary supplement and food and beverage markets. The acquisition, announced on 18 May 2012, strengthens and complements DSM’s newly established, global Nutritional Lipids growth platform. The acquisition, for a total enterprise value of CAD 540 million, is expected to be EPS accretive from 2013 onwards.
With the acquisition of Ocean Nutrition Canada, DSM strengthens and complements its Nutritional Lipids growth platform, which was established after the acquisition of Martek in 2011. DSM can now uniquely offer a full range of products in the rapidly growing nutritional lipids category, offering both fish oil derived omega-3 fatty acids and microbially derived nutritional lipids.
The 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. Healthy nutritional lipids have been shown in a growing body of scientific evidence to provide significant health benefits and support brain, eye, and cardiovascular health throughout life, yet many consumers do not include enough in their daily diets because dietary sources are limited. In particular, leading experts have noted the important health benefits of omega-3 fatty acids, a specific class of nutritional lipids.
DHA (docosahexaenoic acid), is an omega-3 fatty acid abundant in the brain and retina and important to supporting brain health throughout life. EPA (eicosapentaenoic acid) is also an omega-3 fatty acid important for human health. Together, EPA and DHA have been identified as important to supporting cardiovascular health throughout life.
Ocean Nutrition Canada is the leading provider of fish-derived DHA and EPA omega-3 with its MEG-3® product line. DSM is the leading provider of microbial DHA from algae with its life’sDHA™ product line. Also part of the DSM portfolio is life’sARA™, a microbially derived nutritional lipid called ARA (arachidonic acid). ARA is an omega-6 fatty acid and the principal omega-6 in the brain. Like DHA, ARA is important for proper brain development in infants.
Given the very different value proposition and pricing of fish oil derived omega-3s compared to microbial derived nutritional lipids, these products do not compete. In fact, Ocean Nutrition Canada’s fish derived omega-3 products are highly complementary to DSM’s existing microbially derived nutritional lipid products as they address different customer needs and reach different market segments.
The acquisition allows DSM to strengthen and complement its newly established, global Nutritional Lipids growth platform. It strengthens DSM’s position in the North American dietary supplement market by adding fish-oil derived omega-3 fatty acids to its portfolio and it allows 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 from 2013 onwards. 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.
More at The Dutch Daily News