DSM to acquire Glycom for €765 M

This acquisition by DSM will be highly synergetic for both companies

Royal DSM, a global science-based company in Nutrition, Health and Sustainable Living, has announced that it has reached agreement to acquire Glycom A/S (“Glycom”), the world’s leading supplier of Human Milk Oligosaccharides (HMO) for an enterprise value of €765 million. This transaction 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. 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. HMOs are essential for both immune and cognitive development.

Glycom is a Danish company with more than 150 employees, founded in 2005, that pioneered the development and commercialization of HMOs for Early Life Nutrition applications. The company operates a state-of-the-art manufacturing plant in Esbjerg (Denmark) and 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. The company achieved €74 million of sales in 2019. These sales were pre-dominantly generated with Nestlé and 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.

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