08 Nov 2012 DSM now snaps up Fortitech
Rampant nutrition business acquirer, Royal DSM, has splashed the cash for the ninth time in two years – this time to the tune of €495m ($634m) on US-based multinational nutrient blending giant, Fortitech, that has a €212m/$270m annual turnover. Just last week DSM confirmed the acquisition of Cargill’s enzyme’s business.
Subject to customary conditions, the transaction is expected to close before the end of the year.
Fortitech, a privately held company based in Schenectady (New York, US), is a leader in customixed, value-added food ingredient blends for food and beverage, infant nutrition and dietary supplements industries. The company has approximately 520 employees. Fortitech has six production sites located in New York, California, Campinas (Brazil), Kuala Lumpur, Gastrup (Denmark) and Poznan (Poland), with sales offices in China and Mexico.
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 customised solutions in blends with a responsive and flexible customer service model. Fortitech works 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.
The acquisition of Fortitech will accelerate DSM’s strategy to become a full solutions provider in food ingredient blends. For DSM the acquisition of Fortitech will expand its value chain presence, while adding additional capabilities to its business.
Demand for food ingredient blends has grown rapidly over the past 15 years as food & beverage, infant formula and dietary supplement companies transition from in-house production to external supply partners with a number of benefits, including lower quality risk, increased output and accelerated product development.
Future global food ingredient blends industry growth is expected to continue in the high single digits on an annual basis driven by high growth economies and increased outsourcing of the blending.
With the acquisition of Fortitech DSM has now announced over €2.8 billion worth of growth enhancing acquisitions in just over two years, of which €2.4 billion in its Nutrition cluster. 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.
Feike Sijbesma, CEO and chairman of the DSM Managing Board, said: “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. Again, 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 current and future challenges.”
Leendert Staal, President and CEO of DSM Nutritional Products, commented: “The acquisition of Fortitech is another very important step towards the implementation of DSM’s Nutrition strategy. It will help us to expand our value chain presence and to deliver more value to our customers. With Fortitech DSM will be able to deliver customised food ingredient premixes and blends to our customers while at the same time strengthening our international footprint. Fortitech will become an important part of the Human Nutrition and Health business within DSM Nutritional Products. I look forward to welcoming Fortitech’s 520 employees to DSM.”
Walter S Borisenok, President and CEO of Fortitech, said: “Our combined global capabilities will deliver a deeper and more comprehensive resource for providing our customers with innovative customized products and services. Together we will boast a brighter and stronger scientific research database and unsurpassed technical excellence that will enable us to bring superior value to our products and services.”
Since 2012, DSM has spent around €2.4bn on nine acquisitions in human and animal nutrition, including Cargill’s cultures and enzymes business and omega-3 giants Ocean Nutrition Canada and Martek BioSciences – expanding the division’s turnover to an expected €4.6bn.