GLYCOM acquired by ROYAL DSM
Context
Royal DSM reached an agreement to acquire 100% of Glycom A/S. The strategic rationale for the acquisition is to accelerate DSM’s growth in the Early Life Nutrition (ELN) segment by adding HMOs (a novel, high-growth ingredient) to its portfolio. DSM intends to leverage its global sales force to offer Glycom’s HMOs to its broad customer base, reducing Glycom’s historical dependency on a single major customer (Nestlé). Furthermore, DSM aims to utilize its R&D and clinical competencies to speed up the development of next-generation HMOs and introduce these ingredients into new markets such as medical nutrition and pet food. The acquisition is expected to be highly synergetic, with DSM targeting an EBITDA contribution and EPS accretion of €0.10–€0.15 by 2021 as the "SaaS-like" recurring revenue from long-term supply contracts scales up.
GLYCOM, which reported an EBITDA margin of in 2019, is valued in this transaction at an EV/EBITDA multiple of , representing a to the average currently observed in the Healthcare & Pharma sector (14.3x).
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Target
Founded in 2005, Glycom is the world's leading supplier of Human Milk Oligosaccharides (HMOs). HMOs are complex carbohydrates found in breast milk that act as essential prebiotics for infant immune and cognitive development. Glycom is the only fully integrated HMO provider globally, encompassing product development, preclinical/clinical research, and large-scale manufacturing at its state-of-the-art plant in Esbjerg, Denmark. The company pioneered the commercialization of HMOs for the Early Life Nutrition (ELN) market, with Nestlé serving as its primary long-term customer. Glycom’s value proposition lies in its unique IP portfolio and its "innovation roadmap" for next-generation HMOs. Its strategy focuses on providing high-purity, science-based ingredients that allow infant formula manufacturers to more closely mimic the nutritional profile of human breast milk.
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REFERENCES
Valuation range: EV 500M - 1.5b EUR
Revenue range: 50M - 100M EUR
EBITDA range: 25M - 50M EUR
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