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DSM to add world-leading animal nutrition and health specialty businesses with acquisition of Erber Group
ROYAL DSM, a global science-based company in nutrition, health and sustainable living, has announced it has reached an agreement to acquire Erber Group for an en- terprise value of $A1.6 billion.
mitted bridge financing in place.
for improving animal gut health.
phasis on emissions re- duction, feed consumption efficiency and better use of water and land.
said, “In DSM, I recog- nise the mutual values of sustainable stewardship that are so important to us.”
The acquired businesses have combined sales of $A540 million and an ad- justed EBITDA margin above 20 percent for the 12 months to the end of March 2020, with a high single-digit organic sales growth rate over the past five years.
Biomin’s patented and proprietary technology provides the most scien- tifically advanced myco- toxin protection available.
The acquisition will be debt financed, with com-
Biomin is also a major producer of phytogenic and probiotic feed al- ternatives to antibiotics, which complements and strengthens DSM’s posi- tion in the rapidly growing global eubiotics market
DSM continues to ben- efit from a strong balance sheet and remains com- mitted to maintaining a strong investment grade credit profile.
Romer Labs is at the forefront of diagnostic technology, with innova- tive testing solutions for the analysis of mycotoxins in feed and food, food al- lergens and pathogens as well as veterinary drug residues, with accredited full-service labs in Aus- tria, the UK, US and Sin- gapore.
DSM co-CEOs Geral- dine Matchett and Dimitri de Vreeze said, “These are great businesses with strong and sustained track records of profit- able growth and attractive margins.”
“The world must reduce farming’s environmental impact at the same time as increasing protein pro- duction to feed 10 billion people by 2050.
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The value of the trans- ns action represents an EV/ EBITDA multiple of about 14 times the 2020 EBITDA (fiscal year
With state-of-the-art re- search and manufacturing facilities and about 1200 employees around the world, the acquisition of Erber Group is a unique strategic opportunity that provides revenue- enhancing synergies from the combined offering, global customer base and complementary geo- graphic strengths.
DSM’s extensive global network of food and bev- erage customers as well as feed customers stand to benefit from Romer Labs’ expertise and the combined group’s data- based quality assurance offering.
“Biomin and Romer Labs will help strengthen and accelerate the growth of our specialty animal nutrition and health of- fering, including our big data and diagnostic capa- bilities, and it is exciting to be entrusted to take these family founded businesses forward.
“To do that, we have to make sure protein is pro- duced sustainably, using renewable ingredients as much as possible while protecting the wellbeing of animals.
ending September 2020). The transaction – which 6 excludes two smaller units 3 in the Erber Group – is expected to be earnings enhancing in the first year
“DSM is the perfect home for our businesses, as Biomin and Romer Labs will be able to use their new scale to inten- sify our joint contribu- tion to a more sustainable world’s food supply.”
upon completion.
Erber Group’s specialty
Austrian-based Erber Group offers DSM the opportunity to enter the mycotoxin risk manage- ment market as the world leader and extends the company’s position as one of the top suppliers in the rapidly growing animal gut performance manage- ment market.
animal nutrition and health businesses, Biomin and Romer Labs, spe- cialise primarily in my- cotoxin risk management, gut health performance management and food and feed safety diagnostic so- lutions, expanding DSM’s range of higher value-add specialty solutions.
The acquisition of Erber Group further strengthens DSM’s expertise and reputation as a leading provider of animal health and nutrition solutions for farm productivity and sustainability, with an em-
“It was immediately clear to us that the people at Erber Group share our purpose-led mission and will make a wonderful ad- dition to DSM.”
The transaction, which remains subject to cus- tomary conditions, is expected to close in Q4 2020.
Erber Group founder and president Dr Erich Erber
Elanco Announces European Commission Approval of Pending Acquisition of Bayer Animal Health
ELANCO Animal Health Incorporated recently announced the European Com- mission has granted approval of Elanco’s pending acquisition of Bayer AG’s animal health business.
Elanco’s long-standing focus on the veteri- narian with Bayer’s direct-to-consumer ex- pertise, will strengthen and accelerate the com- pany’s innovation, port- folio and productivity strategy.
the needed regulatory reviews.
The company con- tinues to progress towards a mid-year closing, anticipated Au- gust 3, 2020.
The transaction ad- vances Elanco’s port- folio transformation, creating a balance be- tween the farm animal and pet businesses.
In addition to EC ap- proval, Elanco has re- ceived antitrust clear- ance for the transaction in China, Colombia, South Africa, Turkey, Ukraine, Vietnam and provisional clearance in Brazil.
Elanco president and CEO Jeff Simmons said, “Approval from the European Com- mission is an impor- tant milestone towards the completion of our acquisition of Bayer Animal Health.”
It will also expand Elanco’s omnichannel approach, substantially diversifying its pet health business into the retail and e-commerce channels as Elanco continues to determine the best methods for reaching pet owners and veterinarians.
Elanco continues to co-operate with agen- cies in other jurisdic- tions.
“As the transaction edges closer to fruition, we look forward to turning our full atten- tion to delivering inno- vation and an expanded portfolio of solutions for farmers, veterinar- ians and pet owners across the globe.
Elanco previously announced divestiture agreements in the range of $A175 million to $A204 million of rev- enue to help advance
Further, Elanco fully secured financing early in the first quarter of 2020 to complete the transaction through its completed equity issu- ance and pricing of its Term Loan B, which will fund at deal close.
The EC’s approval is conditional on several proposed divestitures.
The transaction re- mains subject to ad- ditional regulatory ap- provals and customary closing conditions.
“Recent months have only underscored the critical work our farmers do in deliv- ering meat, milk, fish and eggs, and the im- portance of providing pet owners and veteri- narians with a variety of solutions in multiple channels from telemed- icine and e-commerce to direct home delivery.
“Combining Bayer Animal Health’s lead- ership in these areas better positions Elanco to deliver on these needs.”
The complementary nature of this trans- action, combining
Elanco president and CEO Jeff Simmons.
Romer Labs also com- plements DSM’s human nutrition and health of- fering to food industry customers.
Mycotoxins occur be- cause of natural fungus contaminants in animal feed and threaten the health of both animals and humans.
Sanphar and EFB, repre- senting 7 percent of Erber Group’s total sales, are not included in this transac- tion.
In addition to increasing the risk of illness, my- cotoxins also reduce the nutritional value of feed.
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Australian Pork Newspaper, July 2020 – Page 14