Novozymes announced that it has acquired PrecisionBiotics Group Limited. Based in Cork, Ireland, PrecisionBiotics Group holds a leading position within probiotics for human gut health and 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,”
says Ester Baiget, President and CEO of Novozymes.
Combining the power of probiotics and enzymes
PrecisionBiotics Group has strong expertise within clinical development, upscaling and commercialization and is well situated in Cork, Ireland, home to a leading 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,”
says Ester Baiget.
“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,”
says Barry Kiely, CEO and co-founder of PrecisionBiotics Group.
When combined, enzymes and probiotics synergistically work hand-in-hand to address health benefits from different angles in more powerful ways.
“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,”
Barry Kiely says.
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. Read more about Novozymes OneHealth here.
About the transaction
Novozymes has acquired 100% of the equity in PrecisionBiotics Group Limited for an amount of DKK 600 million (EUR 80 million) on a cash and debt-free basis. The transaction is structured with an earn-out model, is financed with cash and bank facilities, and does not change the capital structure policy of Novozymes. The acquisition gives Novozymes broader access to the overall consumer health market and more specifically a stronger entry point into the DKK 40 billion (EUR 5 billion) human probiotic supplements market which is expected to grow with a high-single-digit CAGR over the next 3-5 years. PrecisionBiotics Group had a revenue of DKK 100 million in 2019 with solid margins and a positive free cash flow. 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’ dividend policy is unaffected by the acquisition and the stock buyback program totaling up to DKK 1.5 billion will continue as planned.