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The Netherlands: Early Life Nutrition DSM to Takeover Glycom for 828 Million Dollars

| Editor: Ahlam Rais

With the acquisition of Glycom, the world's leading supplier of Human Milk Oligosaccharides, DSM aims to expand its portfolio and accelerate growth in Early Life Nutrition. The move will also enable the firm to create next generation HMOs via DSM’s strong R&D platform.

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The transaction is expected to close in Q2 2020.
The transaction is expected to close in Q2 2020.
(Source: Deposit Photos)

Heerlen/The Netherlands – Royal DSM has recently announced that it has reached an agreement to acquire Glycom, the world's leading supplier of Human Milk Oligosaccharides (HMO) for an enterprise value of 828 million dollars (€765 million). This transaction represents an EV/Ebitda multiple of 20.6x based on the 2019 reported Ebitda, and around 15x based on the estimated 2021 Ebitda.

HMOs are a collection of carbohydrate structures found in human breast milk. They act as prebiotics in infants, which help to develop the desired microbial flora by serving as feed for the good bacteria in the intestine. HMOs are essential for both immune and cognitive development.

Glycom is a Danish company with more than 150 employees, founded in 2005, that pioneered the development and commercialisation of HMOs for Early Life Nutrition applications. The company operates a state-of-the-art manufacturing plant in Esbjerg (Denmark) and is the only fully-integrated HMO provider in the world with its own product development, preclinical and clinical development, regulatory and large-scale production with an exciting innovation roadmap for next-generation HMOs. The company achieved 80 million dollars (€74 million) of sales in 2019. These sales were pre-dominantly generated with Nestlé and Nestlé will continue to be an important customer in the future. The Nestlé contract is a mutually beneficial long-term contract with firmly committed volumes also covering the mid-term horizon.

DSM is a leading global solutions supplier to the Early Life Nutrition industry with its unique portfolio of for example nutritional lipids, vitamins and nutrient premixes. With the acquisition of Glycom, DSM adds HMOs to its portfolio, a novel high-growth ingredient for next generation Early Life Nutrition solutions.

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This acquisition by DSM will be highly synergetic for both companies. DSM can accelerate the growth of Glycom by offering HMO products to DSM’s broad global customer base and integrate it in its full solutions offering for Early Life Nutrition customers. DSM can accelerate the HMO product development of Glycom by leveraging its strong R&D platform and clinical competencies to support Glycom’s development of next generation HMOs. DSM can furthermore introduce HMOs in other segments outside the Early Life Nutrition market, for instance for toddlers, children and adults, as well as in the medical nutrition and the pet food segments, creating additional growth potential.

Geraldine Matchett and Dimitri de Vreeze Co-CEOs of Royal DSM, commented: “We are looking forward to welcoming Glycom to DSM. Our companies have a great fit together, with a shared passion for purpose-led and science-based solutions in Nutrition & Health. This acquisition is an attractive and logical next step for DSM enabling us to provide our customers with innovative Early Life Nutrition solutions in our Human Nutrition business.”

Odd Hansen, CEO of Glycom, added: “We are excited to join DSM. This not only enables us to accelerate the growth of Glycom by adding our HMO products to DSM’s broad global customer base and integrate it in its full solutions offering for Infant Nutrition customers, it also creates leverage with DSM’s strong R&D platform and clinical competencies to support development of Glycom’s next generation HMO’s. DSM is a real great home for Glycom to reach its full potential.”

The transaction is expected to close in Q2 2020.

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