Royal DSM has entered into a definitive agreement to acquire Fortitech Inc. in an all cash transaction for a total enterprise value of $634 million. Subject to customary conditions, the transaction is expected to close before the end of the year.
Fortitech, a privately held company based in Schenectady, N.Y., is a leader in customized, value added food ingredient blends for food and beverage, infant nutrition, and dietary supplements industries. The company has approximately 520 employees, and six production sites located in New York, California, Campinas, Brazil, Kuala Lumpur, Malaysia, Gastrup, Denmark, and Poznan, Poland, with sales offices in China and Mexico. Net sales for 2013 are expected to be about $270 million.
Customers 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 customized solutions in blends with a highly 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, flavors, seasonings, colors, 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.
“The acquisition of Fortitech is another very important step towards the implementation of DSM’s Nutrition strategy,” said Leendert Staal, President and CEO of DSM Nutritional Products. “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 customized 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.”