DSM adds Human Milk Oligosaccharides (HMO) to its portfolio with the acquisition of Glycom

DSM adds Human Milk Oligosaccharides (HMO) to its portfolio with the acquisition of Glycom

(PRESS RELEASE) HEERLEN, the Netherlands, 21-Feb-2020 — /EuropaWire/ — Royal DSM has reached agreement to acquire Glycom A/S (“Glycom”), the world’s leading supplier of Human Milk Oligosaccharides (HMO). The transaction, worth €765 million, 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. HMOs are essential for both immune and cognitive development, 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.

Glycom, founded in 2005, is a Danish company that pioneered the development and commercialization of HMOs for Early Life Nutrition applications. The company has more than 150 employees and operates a state-of-the-art manufacturing plant in Esbjerg (Denmark). Glycom 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. In 2019, Glycom achieved €74 million of sales, pre-dominantly generated with Nestlé. 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. Included in its portfolio are nutritional lipids, vitamins and nutrient premixes. With this transaction, DSM adds HMOs to its portfolio, a novel high-growth ingredient for next generation Early Life Nutrition solutions.

The acquisition of Glycom by DSM will be highly beneficial for both companies. With DSM’s broad global customer base, Glycom’s growth can be accelerated by offering HMO products 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, like for toddlers, children and adults, as well as in the medical nutrition and the pet food segments, creating additional growth potential.

“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,” said Geraldine Matchett and Dimitri de Vreeze Co-CEOs of Royal DSM.

“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,” commented Odd Hansen, CEO of Glycom.

The acquisition is expected to close in Q2 2020. More details can be found in the Presentation to Investors below.

Presentation to Investors: DSM to acquire Glycom A/S Denmark to accelerate growth in Early Life Nutrition

For media and investor information, please contact:

Lieke de Jong-Tops
Senior Communications Manager
+31 45 578 2420

Dave Huizing
Vice-President Investor Relations
+31 45 578 2864

SOURCE: DSM