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Novozymes acquires PrecisionBiotics Group

Christian Fernsby ▼ | July 2, 2020
Novozymes has acquired 100% of the equity in PrecisionBiotics Group Limited for an amount of DKK 600 million (EUR 80 million) on a cash and debt-free basis.
PrecisionBiotics Group   Novozymes
The transaction is structured with an earn-out model, is financed with cash and bank facilities, and does not change the capital structure policy of Novozymes.

Topics: Novozymes PrecisionBiotics Group

The acquisition gives Novozymes broader access to the overall consumer health market and more specifically a stronger entry point into the DKK 40 billion (EUR 5 billion) human probiotic supplements market which is expected to grow with a high-single-digit CAGR over the next 3-5 years.

PrecisionBiotics Group had a revenue of DKK 100 million in 2019 with solid margins and a positive free cash flow. In 2020, the transaction is expected to have a neutral impact on Novozymes’ EBITDA margin but a minor negative impact on the EBIT margin and ROIC including goodwill due to higher invested capital and increased amortizations.

The expected annualized effect of the transaction on the EBITDA margin is neutral while the annualized negative effect on ROIC including goodwill and EBIT margin is roughly 1.0 and 0.5 percentage point respectively.

The acquisition is expected to be EPS accretive by 2022. Novozymes’ dividend policy is unaffected by the acquisition and the stock buyback program totaling up to DKK 1.5 billion will continue as planned.