NETHERLANDS – Global Biosciences Company, DSM is poised to expand its nutritional ingredients portfolio following an agreement with Amyris to acquire its flavor and fragrance (F&F) bio-based intermediates business for an upfront consideration of US$150 million.
According to statement from the company, the deal will add seven intermediate products to its existing personal care and aroma ingredient activities.
Of the new intermediate products being added, four already generate meaningful sales and (Earnings Before Interest, Taxes, Depreciation, and Amortization) EBITDA.
Two of the products have just launched and another one is under development, according to the statement.
Commenting on the acquisition, Gareth Barker, president of DSM personal care and aroma ingredients said, “Thesse bio-based ingredients provide our flavour and fragrance customers with attractive and sustainable additional alternatives”.
According to DSM, the upfront consideration of US$150 million represents an estimated 15x EV/EBITDA 2021 multiple.
The company further revealed that Amyris will share in the EBITDA growth over the period 2021-2024 of certain activities, mainly in the products just launched or under development.
Bio-based F&F ingredients are an impressive addition to DSM’s portfolio as they offer additional alternatives to chemistry-based products, as well as botanically sourced ingredients.
Their addition, according to DSM, will lead to additional earn-outs equal to 9x the realized EBITDA in 2024, which is estimated to result in a total earn-out amount of US$100-150 million.
Their acquisition also strengthens DSM’s biotechnology base with F&F intermediate products and increases the scale of DSM’s biotechnology activities in nutritional ingredients.
It also broadens the company’s biotechnology-based offerings for its current F&F customer base while at the same time strengthening DSM’s sustainability profile further.
DSM’s relationship with Amyris dates back to 2017 when the Dutch-based biosciences company made an equity investment in Amyris.
That same year, the companies entered into development cooperation focused on products for the global health and nutrition markets, including vitamins and other nutritional ingredients.
DSM also recently acquired Amyris’ farnesene business and technology for nutritional and F&F ingredients as well as its biotechnology manufacturing facilities in Brotas, Brazil.
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