Royal DSM acquired Tortuga Companhia Zootécnica Agrária (Tortuga) in an all cash transaction for a total enterprise value of about €465 million.
Tortuga is a privately held Brazilian company and a major company in nutritional supplements with a focus on pasture raised beef and dairy cattle.
The company is headquartered in Sao Paulo, Brazil with approximately 1,200 employees and 700 sales agents throughout Brazil. It has three production sites in Mairinque (SP), São Vicente (SP) and Pecém (CE).
Net sales for 2012 are expected at about €385 million with an EBITDA of about €60 million. DSM has identified attractive revenue and other synergies.
Depending on the actual 2012 EBITDA result, an adjustment in the purchase price up to a maximum enterprise value of about €490 million can be made, based on the same EBITDA-multiple. Subject to customary conditions, the transaction is expected to close in Q1 2013.
Growing supplement market
Brazil raises mainly beef and dairy cattle on pasture, which means the animals often lack minerals, phosphorus, nitrogen sources, vitamins and micro nutrients in their diet. Therefore, nutritional supplements are required to enhance animal performance and health.
The size of the global market for nutritional supplements for ruminants is estimated to be well in excess of €4 billion, growing by around 3% per year with significantly stronger growth (7-10%) in organic trace minerals (chelates).
Tortuga is one of the global leaders in organic trace minerals, despite the fact that it has so far been active only in Latin America.
DSM expects to profit from the takeover by introducing DSM ingredients into Tortuga’s products and mixes as well as into its distribution channels for ruminants.
Also the acquisition of Tortuga will broaden DSM’s ingredient portfolio to include organic trace minerals and will allow DSM to become a full animal nutrition solution provider by adding a major ruminants section to its portfolio.
The acquisition of Tortuga is the seventh acquisition in the Nutrition cluster since DSM announced its corporate strategy DSM in motion: driving focused growth in September 2010.
Feike Sijbesma, CEO and Chairman of the DSM Managing Board, said: “With the acquisition of Tortuga we have announced €2.2 billion worth of growth enhancing acquisitions, of which €1.8 billion in our Nutrition cluster, since we embarked on our current strategic plan less than two years ago.
“After completion of the announced acquisitions DSM’s Nutrition cluster will on a pro forma basis surpass €4 billion in net sales on an annual basis, resulting in stronger and more stable growth and profitability for DSM overall.”
Creuza Fabiani, President of Tortuga, commented: “Having been in business for almost 60 years, Tortuga still has huge potential for growth, as well as a great deal to offer the animal proteins production sector.
“I chose DSM after careful consideration since their operations in Brazil do not conflict with those of Tortuga, and also because of the great synergy between the two companies, which will provide the entire team at Tortuga with the opportunity to grow.”
More information can be found in the presentation that can be found on DSM’s corporate website.