Novozymes acquires PrecisionBiotics
Based in Cork, Ireland, PrecisionBiotics Group holds a leading position within probiotics for human gut health and Novozymes said it is well positioned with several clinically backed products already in the market.
“This acquisition fits well with our strategy, Better business with biology, where we have focus on human health as one of our opportunities for growth. With this investment, we take another important step in implementing the strategy and setting a foundation of growth for our business,” said Ester Baiget, president and CEO of Novozymes.
PrecisionBiotics Group has expertise within clinical development, upscaling and commercialization and is situated in Cork, Ireland, which is home to an academic society within human gut health.
“We welcome employees in PrecisionBiotics Group to Novozymes. PrecisionBiotics Group brings in complementary technologies, a similar science-based approach and a matching culture. With our unique expertise within discovery and enzymes and PrecisionBiotics’ strong capabilities and network within probiotics for human health, we will be in a unique position. It’s a position where we can expand market opportunities and develop new and highly efficient products,” Baiget said.
Barry Kiely, CEO and co-founder of PrecisionBiotics Group, said, “By becoming a part of Novozymes, we will get a global presence across businesses and new capabilities within science and discovery of new strains. This will help us to grow by developing new products where we can combine enzymes and probiotics.
“Novozymes is a strong company based on science with a global market presence and a purpose to find biological solutions for better lives in a growing world. We look forward to speeding up the development of our pipeline and to a global roll-out of products to accelerate growth.”
Novozymes has established OneHealth to market solutions within human health under one umbrella. The aim is to help people live healthier and better lives by use of probiotics and enzymes.
Novozymes said the acquisition gives it broader access to the overall consumer health market and more specifically a stronger entry point into the €5bn ($5.6bn) human probiotic supplements market which is expected to grow with a high-single-digit CAGR over the next three to five years.
In 2020, the transaction is expected to have a neutral impact on Novozymes’ EBITDA margin but a minor negative impact on the EBIT margin and ROIC including goodwill due to higher invested capital and increased amortizations.
The expected annualized effect of the transaction on the EBITDA margin is neutral while the annualized negative effect on ROIC including goodwill and EBIT margin is roughly 1.0 and 0.5 percentage point respectively.
The acquisition is expected to be EPS accretive by 2022. Novozymes said its dividend policy is unaffected by the acquisition and the stock buyback program will continue as planned.