DSM to buy US biotech company Martek for $1.09B
Tuesday, December 21, 2010
AMSTERDAM (AP) — Royal DSM NV, the world’s biggest maker of vitamins, said Tuesday it will bid $1.09 billion (830 million) in cash for U.S. biotech firm Martek Biosciences Corp., in a management-endorsed buyout that would improve its presence on the American infant formula market.
The Dutch chemicals company’s $31.50 per share offer for Martek represents a 35 percent premium to Martek’s closing price on Dec. 20.
DSM, based in Heerlen, the Netherlands, makes nutritional supplements, fibers used in bulletproof vests, and ingredients used in vaccines, as well as industrial chemicals.
DSM’s Chief Executive Feike Sijbesma said the purchase “will add a new growth platform to our nutrition business,” while Martek would benefit from DSM’s larger distribution network.
Martek is based in Colombia, Maryland. Its customers include Danone, Nestle, Kellogg’s and General Mills, among others.
DSM said its offer will begin in mid-January and is conditional on receiving a majority of shares. It expects the deal to close sometime in the second quarter.
DSM said the deal, which must also be approved by regulators, would add at least 0.15 to annual per share earnings in the first year.
Shares in DSM rose 4.5 percent to 42.845 in Amsterdam.
In November, DSM reported a third quarter net profit of 79 million, or 0.76 per share, on sales of 2.15 billion. As of Tuesday, the company has a stockpile of more than 2 billion in cash due to profits and recent sales of several low-margin businesses.