DSM set to spend €1bn on medium-sized acquisitions28 September 2012
Dutch firm Royal DSM has revealed that it planning on investing up to €1 billion on medium-sized acquisitions in a bid to expand its nutrition, food ingredients and specialist plastics portfolio.
€1.8 billion of the €2.2 billion spent by DSM since 2010 has been on high-margin nutrition firms and nutrition now accounts for €9 billion of DSM’s sales and 67% of the company’s EBITDA.
Recent purchases include a €420 million deal for Canadian fish oil firm Ocean Nutrition and the €465 million acquisition of Brazilian animal nutrition manufacturer Tortuga.
“It is very unlikely that we will do a really big one, but we also don't like 20, 30, 40 very small ones," Rolf-Dieter Schwalb, DSM’s chief financial officer told Reuters.
Referring to the $1.1 billion purchase of US food ingredients firm Martek, Schwalb said DSM would only consider spending a similar amount for "for something really, really interesting". Schwalb added that the firm has not excluded making further divestments in sub-scale sectors.
“The portfolio is more resilient, more stable, less cyclical," added Feike Sijbesma, DSM’s chief executive.
At a strategy update earlier this week, Sijbesma said DSM remains cautious in the short-term but confident that the “robustness” of its portfolio and “strategic confidence” would deliver value for shareholders in the longer term.
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