DSM to acquire HMO supplier Glycom for 765m euros

DSM has secured a deal to acquire Danish company Glycom for €765 million, as it aims to accelerate growth in early life nutrition.

Established in 2005, Glycom develops and supplies human milk oligosaccharides (HMOs) for early life nutrition applications.

HMOs are a collection of carbohydrate structures found in human breast milk essential for both immune and cognitive development. They act as prebiotics in infants which help to develop the desired microbial flora by serving as feed for good bacteria in intestines.

With the acquisition, DSM adds HMOs to its portfolio of lipids, vitamins and nutrients, enabling the company to integrate the ingredient in its full solutions for its early life nutrition customers.

By utilising its R&D platform, DSM believes it can accelerate the development of Glycom’s HMOs, as well as introduce it into other segments such as toddlers, children, adults and pet food, creating additional growth potential.

Odd Hansen, CEO of Glycom, said: “We are excited to join DSM. This not only enables us to accelerate the growth of Glycom by adding our HMO products to DSM’s broad global customer base and integrate it in its full solutions offering for infant nutrition customers, it also creates leverage with DSM’s strong R&D platform and clinical competencies to support development of Glycom’s next generation HMOs.”

Glycom operates a manufacturing plant in Esbjerg, Denmark, and reportedly achieved €74 million of sales in 2019, mainly generated with Nestlé.

Following the transaction, Nestlé will remain an important customer.

Co-CEOs of DSM, Geraldine Matchett and Dimitri de Vreeze, said: “Our companies have a great fit together, with a shared passion for purpose-led and science-based solutions in nutrition and health.

“This acquisition is an attractive and logical next step for DSM enabling us to provide our customers with innovative early life nutrition solutions in our human nutrition business.”

The transaction is expected to close in the second quarter of 2020.

Last year, DSM purchased dairy solutions provider CSK Food Enrichment for a cash consideration of about €150 million.