DSM and Nutreco Considering Joint Bid for Animal Nutrition Giant Provimi
The Provimi Group is active worldwide in several types of animal nutrition and is a leader in all markets where it is present. It employs about 7,000 people and had annual sales of € 1.6 billion in 2010.
Jul 28 2011 --- Royal DSM and Nutreco have responded to recent media speculation regarding a possible acquisition of Provimi. DSM and Nutreco confirm that for this purpose they have decided to jointly explore the possibility to acquire Provimi, should this opportunity arise. A further statement will only be made if and when appropriate. The two companies are seeking to split up the asset that could carry a price tag of more than 1.8 billion euros ($2.6 billion).
The Provimi Group is active worldwide in several types of animal nutrition and is a leader in all markets where it is present. It employs about 7,000 people and had annual sales of € 1.6 billion in 2010. Provimi has 67 production centres in 26 countries and exports to over 100. Provimi manufactures products and supplies technical support for various species, predominantly ruminants, poultry and swine. Permira, based in London, bought Provimi in 2007 from private equity rivals CVC Capital Partners Ltd. and PAI Partners.
Provimi delivered a very strong result for the half year yesterday, continuing to grow and exceed expectations in many of its businesses. In line with Provimi’s strategy to focus on the value added segments of premix and specialities, 64.8% of gross margin was generated from premix and specialities against 62.5% last year. The growth in premix and specialties means that complete feed is a less significant contributor in the overall business performance.
Provimi continues to drive growth in the emerging markets and the key growth regions of Latin America, Russia and Asia represent 45.9% of the total EBITDA against 43.9% last year. Investment and focus in these key markets are expected to fuel further growth going forward and Provimi is well positioned to exploit the opportunities that these markets will bring.
Feed Solutions has extended its product and service offerings globally, accelerating growth in targeted areas worldwide with the successful launch of several new products. These include a range of toxin binders, several ruminants’ products including an innovative product against heat stress of cows called ICE and an ambitious sow nutrition programme. In poultry Provimi’s broiler model has been launched.
Provimi successfully completed the sale of the Pet Food business in June and is now a purely Animal Nutrition business in line with its stated strategy.
Ton van der Laan, Chairman and Group Chief Executive Officer commented: "Our strategy of positioning Provimi as the leading global nutritional solutions provider in the centre of the value chain has resulted in double digit turnover and profit growth in the first half of 2011.”
“We will continue to leverage and strengthen the capabilities that are required to deliver nutritional value to our customers worldwide. Our improved customer focus and extensive knowledge base enable us to deliver high-quality tailored solutions which improve the business results of our customers. This has led to solid growth in the profitable premix and specialities businesses in our core growth markets such as Latin America, Russia and Asia. In the second half of the year, we will continue to accelerate the Group’s performance. We are well on track to deliver an EBITDA of € 175 million for the full year, up 10.9% on last year”.
