June 25, 2020 / 10:24 AM / a month ago

Novozymes buys Irish probiotic maker PrecisionBiotics

COPENHAGEN (Reuters) - Danish enzyme maker Novozymes NZYMB.CO will buy Ireland-based PrecisionBiotics in a $90 million deal, it said on Thursday, its second acquisition of a probiotics company in recent years as it seeks to grow its human health business.

FILE PHOTO: Containers are seen in a laboratory in an enzyme factory of Danish biopharmaceutical company Novozymes in Beijing, China May 24, 2011. REUTERS/David Gray/File Photo

“The presence that we have today in human health is small, and this is why we are coming with an acquisition to get the critical mass, to drive the momentum,” newly appointed chief executive Ester Baiget told Reuters.

Baiget, who took over the helm of Novozymes in February, said the main focus was on growth, both in the top line and profitability. “You will see the combination of both moving forward.”

Novozymes said it would partly finance the 600 million Danish crown ($90.4 million) acquisition through cash and partly through bank facilities. It would not affect dividend payouts or share buy-back plans, it said.

Based in Cork, Ireland, PrecisionBiotics produces live bacteria, known as probiotics, which can improve gut health in animals and humans, as part of a $6 billion market for human probiotic supplements.

In a strategy revamp last year Novozymes said it would focus on new businesses including the development of probiotics to improve humans’ throat and gut health, building on the 2016 acquisition of German microbial research company Organobalance.

The bolt-on acquisition of PrecisionBiotics will be earnings per share accretive by 2022 and will have a minor negative impact on operating margin this year, Novozymes said.

Novozymes’ largest business area is sales of enzymes to detergent makers such as Procter & Gamble and Henkel, but the company also has divisions in food & beverages and bioenergy, such as making enzymes for ethanol production.

Shares in Novozymes were up 0.63% at 1049 GMT on the Copenhagen bluechip index.

($1 = 6.5981 Danish crowns)

Reporting by Nikolaj Skydsgaard; Editing by David Evans and Jan Harvey

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