• Total enterprise value CAD 540 million (about €420 million);
• Ocean Nutrition Canada expected 2012 Net Sales: approximately CAD 190 million with EBITDA of CAD 55-60 million;
• Ocean Nutrition Canada is a leader in fish-oil derived Omega-3 fatty acids for dietary supplements, highly complementary to DSM’s successful Martek acquisition in 2011;
• Strong strategic fit; acquisition will strengthen and complement DSM’s global Nutritional Lipids growth platform, based on healthy, polyunsaturated fatty acids (PUFAs);
• Acquisition extends DSM’s portfolio of omega-3 fatty acids reaching a wide range of different market segments and applications;
• Value creating acquisition; EPS accretive as from 2013.
Royal DSM, the global Life Sciences and Materials Sciences company, announced today that it has entered into a definitive agreement with Clearwater Fine Foods and funds managed by Richardson Capital to acquire Ocean Nutrition Canada for a total enterprise value of CAD 540 million. Subject to customary conditions, the transaction is expected to close in H2 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, Canada) 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 CAD 190 million with an EBITDA of CAD 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 is the world’s largest supplier of fish-derived Omega-3 fatty acids to the dietary supplement and food and beverage markets. 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.
DSM expects the transaction to be EPS accretive as from 2013. The acquisition is expected to accelerate revenue growth through material revenue synergies with expanded distribution, marketing and product development. Customary operational efficiencies will also be realized in the integration process.
The acquisition of Ocean Nutrition Canada is the fifth acquisition in the Nutrition cluster since DSM in September 2010 announced its corporate strategy DSM in Motion: driving focused growth. 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. The resulting stronger, more stable growth and profitability will enable DSM to continue to deliver shareholder value.
Feike Sijbesma, CEO and Chairman of the DSM Managing Board, said: “After our successful acquisition of Martek in 2011, the acquisition of Ocean Nutrition Canada is the logical next step in developing our Nutritional Lipids into a major growth platform for our Nutrition cluster. Our science-based knowledge and expertise in nutritional ingredients will help to further grow Ocean Nutrition Canada’s business as part of DSM. This acquisition fully fits DSM’s strategy as we continue to create value for all stakeholders by providing innovative, sustainable solutions to the world’s greatest challenges.”
Stephan Tanda, member of the DSM Managing Board and responsible for the Nutrition cluster, commented: “We look forward to welcoming the very capable team of Ocean Nutrition Canada employees to DSM and to developing this exciting opportunity together. PUFAs have developed into a major nutrition ingredient category, based on solid science and well recognized health benefits, driving consistently high market growth rates. By combining Ocean Nutrition Canada’s strength in fish oil derived Omega-3s with our unique global infrastructure and broad access to dietary supplement and food & beverage markets, we will be able to provide our customers around the world with market leading value and a steadily widening range of applications.”
Martin Jamieson, President and CEO of Ocean Nutrition Canada, said: “ONC is a truly remarkable enterprise. From its founding in 1997 through to the present day, our Nova Scotia based company has led one of the most attractive growth segments of the global nutrition industry. In 15 short years the company has grown from start-up to global leader in fish oil derived Omega 3 and this acquisition by DSM, a leading international business with much greater scale and reach, is the logical next step in our evolution. Our success could not have been achieved without the talent and dedication of our 400 plus employees, the support and vision of our shareholders and the strong and well established relationships that the company has developed in the communities in which we operate. DSM is the right partner to guide our next phase of development and they will be great stewards of Ocean Nutrition going forward. We are delighted that they appropriately recognize the value of ONC’s worldwide market success, our leading edge technology platform and especially our immensely talented workforce.”
Today DSM (dsm.com) will hold a conference call for the media from 08.00 AM – 08.30 AM CET (+31 (0)10 29 44 215 or +44 (0) 203 365 3207) and a conference call for investors and analysts from 09.00 AM – 10.00 AM CET (+31 (0)10 29 44 271 or +44 (0) 203 365 3207). Also, more information can be found in the presentation that can be found on DSM’s corporate website.
About Ocean Nutrition Canada
Ocean Nutrition Canada is the world's largest supplier of Omega-3 EPA/DHA ingredients to the dietary supplement and food manufacturing markets. Ocean Nutrition Canada also has the largest privately owned marine research and development facility in North America. Its MEG-3® branded ingredients offer high quality, odor-free, tasteless Omega-3 EPA/DHA from fish oil - the best source of Omega-3 EPA/DHA. By using clean, reliable, sustainable resources, Ocean Nutrition Canada provides its customers a competitive edge in the rapidly growing Omega-3 EPA/DHA market. Ocean Nutrition Canada customers also enjoy specialized services from critical technical and regulatory support to innovative R&D and global marketing support. Ocean Nutrition Canada is based in Nova Scotia, Canada.