Royal DSM has completed the acquisition of Fortitech. The transaction, for a total enterprise value of US$634 million (about €495 million), strengthens DSM’s Human Nutrition and Health business, by expanding the company’s value chain presence and adding additional capabilities. As a result of the acquisition, announced on 8 November 2012, approximately 520 employees are joining DSM.
“The acquisition of Fortitech is the ninth acquisition in the Nutrition cluster since we announced our corporate strategy DSM in motion: driving focused growth in September 2010,” said Feike Sijbesma, CEO and chairman of the DSM Managing Board. “These acquisitions will contribute to the current and future growth of our attractive portfolio in health, nutrition and materials, resulting in stronger and more stable growth and profitability for DSM overall.”
“Completing the acquisition of Fortitech is another milestone in the implementation of DSM’s Nutrition strategy,” said Leendert Staal, president and CEO of DSM Nutritional Products. “We are expanding our value chain presence and will be able to deliver more value to our customers. Fortitech will be an important part of the Human Nutrition and Health business within DSM Nutritional Products.
Our attention is now fully focused on ensuring a smooth integration of the Fortitech business in a timely and efficient manner, with business continuity and customer satisfaction as key priorities for us while we welcome Fortitech’s 520 employees to DSM.”
According to DSM customers - especially in the food and beverage industry - are increasingly looking for solutions providers offering a broad range of food ingredient blends that cover a more comprehensive portfolio of ingredients, sometimes even requesting the complete formula, for a given product. DSM’s Human Nutrition and Health (HNH) premix business is a channel to market primarily for its own nutritional ingredients.
Fortitech offers customized solutions in blends, working with a broad range of externally sourced nutrients and food ingredients including vitamins, minerals, nucleotides, amino acids, herb extracts, nutraceuticals, flavours, seasonings, colours, caffeine, proteins, sweeteners, carbohydrates and enzymes.
With the acquisition of Fortitech DSM now has announced over €2.8 billion worth of growth enhancing acquisitions in just over two years, of which €2.4 billion in its Nutrition cluster.
After completion of the announced acquisitions, DSM’s Nutrition cluster will on a pro forma basis realise €4.6 billion in net sales with an EBITDA-margin target in the range of 20-23% on an annual basis, resulting in stronger and more stable growth and profitability for DSM overall, the company said.
Full scale integration of the two businesses will now begin. A dedicated integration team consisting of both DSM and Fortitech representatives will work to assess the best way to combine the two organisations while focusing on future synergy generation between both businesses.
