AUSTRIA – Royal DSM, a Netherland based, health and nutrition player, has announced that it has completed its acquisition of Erber Group’s Biomin and Romer Labs for an enterprise value of EUR980 million (US$1.1 billion).
Biomin specializes primarily in mycotoxin risk management and gut health performance management, and the Romer Labs business focuses on food and feed safety diagnostic solutions.
Both expand DSM’s range of higher value-add specialty solutions. Sanphar and EFB, representing 7% of Erber Group’s total sales, were not included in the transaction.
“The acquisition of Erber Group’s Biomin further strengthens DSM’s expertise and reputation as a leading provider of animal health and nutrition solutions for farm productivity and sustainability, with an emphasis on emissions reduction, feed consumption efficiency, and better use of water and land,” the companies said in a joint press release.
“It is therefore very much aligned with DSM’s focus to make animal farming more sustainable from both an ecological and economical perspective. Romer Labs also complements DSM’s human nutrition and health offering to customers in the food and beverages market segments.”
According to the companies, the acquired businesses have combined sales of EUR330 million and an adjusted EBITDA margin of more than 20% for the 12 months to the end of March 2020, with a high single-digit organic sales growth rate over the past 5 years.
The acquisition will be debt financed, with committed bridge financing in place, DSM said when the acquisition was announced.
ERBER Group is a leading group of companies in the field of food and feed safety, with focusing on natural feed additive as well as feed and food analysis with headquarters in Austria/Getzersdorf. ERBER Group consists of BIOMIN and ROMER LABS.
The deal, which was first announced on June 12, remains subject to customary conditions and is expected to close in Q4 2020.
Through this deal, DSM enters the mycotoxin risk management market “as the world leader” and the move will also enhance the company’s position in the animal gut performance management market.
“These are great businesses with strong and sustained track records of profitable growth and attractive margins,” Geraldine Matchett and Dimitri de Vreeze, Co-CEOs of DSM, said.
“Biomin and Romer Labs will help strengthen and accelerate the growth of our specialty animal nutrition and health offering, including our big data and diagnostic capabilities, and it is exciting to be entrusted to take these family-founded businesses forward.”
The acquisition will be debt financed, with committed bridge financing in place. DSM said it continues to benefit from a strong balance sheet and remains committed to maintaining a strong investment grade credit profile.
The acquisition is a strategic opportunity that provides revenue-enhancing synergies from the combined offering, global customer base, and complementary geographic strengths, it stressed. DSM’s rationale for the acquisition is presented in detail in a report for investors.
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