Heerlen, NL, 26 Oct 2012 09:15 CEST
Royal DSM, the global Life Sciences and Materials Sciences company, announced today that it has reached agreement with Cargill to acquire Cargill’s cultures and enzymes business in an all cash transaction for a total enterprise value of €85 million. Subject to customary conditions, the transaction is expected to close in the next couple of months. DSM and Cargill announced on 20 September 2012 they were in exclusive discussions about this transaction.
The cultures and enzymes business of Cargill is a leading global manufacturer of cultures and enzymes for the dairy and meat industries with manufacturing operations in Wisconsin (USA) and France. It has a strong pipeline of new products built on three pillars of technology: culture texture toolbox, fast acidification for cheese yield improvements and culture flavor systems. The business generates net sales of about €45 million per year with approximately 200 employees.
The market for cultures and enzymes is valued at over €1 billion, growing steadily at more than 5% per annum. Applications are primarily found in dairy products which continue to have a healthy and tasty appeal to consumers worldwide. The growing diversity of dairy products requires versatile culture offerings enhancing taste, texture and mouthfeel characteristics as well as health benefits (lower fat, less sugar, etc.) and convenience.
By combining the cultures and enzymes business of Cargill with the dairy business of DSM Food Specialties a strong global player will be created, enabling DSM to propel sales growth as well as capture sizable synergies in global manufacturing and customer reach as well as innovation capabilities in biotechnology and SG&A.
The combination of the two businesses will allow DSM to achieve its ambition to become a tier one supplier of cultures and enzymes to the global dairy market and will greatly accelerate DSM’s growth plans for its business, which continues to benefit from consumer demand for more versatile dairy products. The acquisition further strengthens DSM’s global position in dairy ingredients with enzymes, PUFAs, vitamins, cultures, probiotics, bio actives, preservation systems and tests.
Stephan Tanda, Member of the DSM Managing Board and responsible for the Nutrition cluster, said: “This is a very important growth enhancing acquisition for our Food Specialties business and fully fits our strategy as we continue to create value for all stakeholders by providing innovative, sustainable solutions to the world’s greatest current and future challenges”.
Hans-Christian Ambjerg, President DSM Food Specialties, commented: “We are very excited about this opportunity to build critical mass and to serve our customers faster with more innovative solutions. We look forward to welcoming the Cargill employees with their great knowledge and expertise.”
The acquisition of Cargill’s cultures and enzymes business is the eighth acquisition in the Nutrition cluster since DSM announced its corporate strategy DSM in motion: driving focused growth in September 2010. 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.