Royal DSM and Martek Biosciences Corporation have entered into a definitive agreement under which DSM will acquire all the outstanding shares of common stock of Martek for $31.50 in cash per share, for total consideration of $1,087 million.
The transaction is in line with DSM’s strategy for its Nutrition cluster “continued value growth” and adds a new growth platform for healthy and natural food ingredients for food and beverage applications, especially focused on Polyunsaturated Fatty Acids, such as microbial Omega-3 DHA and Omega-6 ARA, according to the company. Martek’s algal and other microbial-based biotechnology platform and its algal technology pipeline is expected to deliver new nutritional and non-nutritional growth opportunities.
The transaction has been approved by DSM’s Supervisory Board and is recommended by Martek’s Board of Directors. Subject to customary conditions, the tender process is expected to close in February 2011, and the transaction is expected to close in the first or second quarter of 2011.
The agreed upon price represents a premium of 35% to Martek’s closing share price of $23.36 Dec. 20, and 39% to the volume weighted average closing price of Martek’s common stock over the last 90 days.
The acquisition is structured as an all-cash tender offer for all the outstanding shares of Martek common stock to be followed by a merger in which each remaining share of Martek common stock would be converted into the same cash per share price paid in the tender offer. The tender offer is expected to commence between Jan. 10 and 25, 2011.
The transaction is not subject to a financing condition, and DSM intends to finance the acquisition from existing cash.