8 Aug 2012 --- Royal DSM, the global Life Sciences and Materials Sciences company, announced today that it has entered into a definitive agreement to acquire Tortuga Companhia Zootécnica Agrária (Tortuga) in an all cash transaction for a total enterprise value of about €465 million ($574.7m).

Tortuga, a privately held Brazilian company, is a leading 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. Tortuga has three production sites in Brazil. Net sales for 2012 are expected at about €385 million (BRL 965 million) with an EBITDA of about €60 million (BRL 150 million). DSM has identified attractive revenue and other synergies.

Pasture raised beef and dairy cattle spend a significant part of their life feeding on natural vegetation, which means they 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.

The acquisition of Tortuga allows DSM to capture value from its extended value chain presence with a broad portfolio of nutritional ingredients for animal nutrition, while leveraging its strong international footprint. Specifically, value will be created through revenue synergies by introducing DSM ingredients into Tortuga’s products and mixes as well as into its distribution channels for ruminants, and bringing Tortuga’s unique products, especially the complete organic trace minerals portfolio of products, to DSM animal nutrition customers worldwide. The acquisition will also strengthen DSM’s ability to provide integrated nutritional solutions, capturing increased value from know-how and animal nutrition advisory services.

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. Tortuga will strengthen DSM’s presence in nutritional supplements and additives for ruminants and is expected to accelerate revenue growth through leveraging Tortuga’s know-how and strong position in ruminant supplements in other ruminants markets in Latin America and around the world. DSM can also introduce Tortuga’s strong position in organic trace minerals to other market segments worldwide such as nutrition solutions for swine and poultry producers.

The transaction will also strengthen DSM’s presence in Brazil, the leading global beef producer and exporter with an attractive expected growth, and will give DSM additional sales channels in the Brazilian market. The acquisition is also consistent with DSM’s strategic focus on High Growth Economies, one of the four growth drivers of DSM’s strategy.

DSM expects the transaction to be immediately EPS accretive. Customary operational efficiencies will also be realized in the integration process.

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. These acquisitions form an integral part of DSM’s strategy for its Nutrition cluster and will contribute to the current and future growth of DSM’s attractive portfolio in health, nutrition and materials.

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. This acquisition fully fits DSM’s strategy as we continue to create value for all stakeholders by providing innovative, sustainable solutions to the world’s greatest current and future challenges.”