Royal DSM NV (DSM), the world’s largest vitamins maker, is looking for acquisitions in its nutrition and performance materials units to keep expanding its product portfolio, Chief Executive Officer Feike Sijbesma said.
DSM has spent about 2.2 billion euros ($2.8 billion) on takeovers in the past two years as Sijbesma turned the Dutch company into a maker of nutritional supplements and engineering plastics, shaking off its traditional commodity chemicals businesses.
“A size of 400 to 500 million euros we like,” Sijbesma said in an interview today at an investor event in Kaiseraugst, Switzerland, referring to the annual sales of a takeover target. “Then you get a good feeling of the size of a company and you can do a good due diligence.”
The majority of the last two years’ acquisitions, about 1.8 billion euros, were in the nutritional field, including babyfood ingredients maker Martek and Ocean Nutrition Canada, which processes fish oil from Peru, Canada and the U.S. The unit’s sales reached about 4.4 billion euros on an annual basis in the first half of 2012, DSM said today.
“The set of acquisitions we’ve done so far went relatively smoothly, we didn’t encounter any problems or skeletons in the closets,” Sijbesma said.
DSM has been able to double ”the price we paid” looking at the net present value of both Martek and Ocean Nutrition, which are now worth 1.4 billion euros and 850 million euros, Chief financial officer Rolf-Dieter Schwalb said today. The Heerlen-based company still has 1 billion euros available for acquisitions, the CFO added.
Takeovers in the performance materials unit, which is exposed to markets such as automotive and building and construction, have been harder to justify in the past two years, Schwalb said. “But we will continue to look in that field as well.”
Sijbesma said today the company is headed for the low end of its target range for profit for 2013 and he remains cautious about the near-term economic outlook. Earnings before interest, taxes, depreciation and amortization is forecast to reach about 1.4 billion euros, DSM said today.
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