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DSM to Expand its Nutritional Lipids Growth Platform in €418 Million Deal

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DSM to Expand its Nutritional Lipids Growth Platform in €418 Million Deal

DSM to Expand its Nutritional Lipids Growth Platform in €418 Million Deal
May 18
11:40 2012

Royal DSM, the global life sciences and materials sciences company, has agreed to acquire Ocean Nutrition Canada, the world’s largest supplier of fish-derived Omega-3 fatty acids to the dietary supplement and food and beverage markets, for a total enterprise value of C$540 million (Eur418 million). Subject to customary conditions, the transaction is expected to close in the second half of 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 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 C$190 million with an EBITDA of C$55-60 million. The average annual growth of the company over the past 5 years in local currency amounted to nearly 20%.

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’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.

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