Summary of investments and acquisitions in the nutrition, natural and organic food, health & wellness, and green product industries.

• NCN News for January 16, 2011

 DSM acquires leading EFA supplier Martek Biosciences
Royal DSM NV of Holland is buying specialty ingredients company Martek Biosciences Corporation (Columbia, Md.) for $1,087 million in cash through a tender offer. Martek had net sales of $450 million for fiscal year ended October 31, 2010. Founded in 1985, Martek owns two fermentable strains of microalgae which produce docosahexaenoic acid (DHA), a polyunsaturated omega-3 fatty acid, and a similar patented process for a fungus that produces arachidonic acid (ARA), a polyunsaturated omega-6 fatty acid. Martek went public in 1993 after entering into license agreements with three infant formula companies. Today, Martek’s essential fatty acids are found in most U.S. infant formulas, in addition to a range of dietary supplements and functional foods. “The transaction positions DSM as a leader in PUFAs and in Infant Nutrition, and strengthens DSM’s presence in the United States in addition to expanding DSM’s complementary technology platform in algal and microbial fermentations,” DSM stated. DSM will also benefit from Martek’s acquisition of Amerifit in 2010, a consumer business for branded dietary supplements including Culturelle and AZO probiotics and Estroven for menopause symptons. DSM produces vitamins, carotenoids, and PUFAs (polyunsaturated fatty acids) for the food and dietary supplement industries. Both Martek and DSM are NCN Cornerstone Investors.

Danisco to strengthen DuPont’s presence in nutrition and renewable energy
DuPont is acquiring Danisco AS of Denmark, a global enzyme and specialty food ingredients company, for $5.8 billion in cash and assumption of $500 million of Danisco net debt. About 65% of Danisco’s sales are generated by specialty food food ingredients like probiotics and sweeteners, including Howaru and FlorFIT probiotics, BetaPower betaine and Litesse low glycemic prebiotic fiber. Danisco’s enzymes division Genencor contributes 35% of total sales; its products are used in biofuels, sweeteners, cleaning, processing and industrial applications. Genencor is the second-largest maker of industrial enzymes after Novozymes. Danisco and DuPont are already joint venture partners in cellulosic ethanol technology. For FY 2010/11 Danisco, which has nearly 7,000 employees globally, forecast revenue of $2.66 billion. The deal is reported to be $30-billion DuPont's biggest in a decade.

Atrium purchases Seroyal in one of its largest deals
Dietary supplement company Atrium Innovations Inc. (Quebec City) has purchased Seroyal International (Toronto) for US$110 million in cash, implying an LTM EBITDA ratio of 7.5 times. Like Atrium, Seroyal targets the health care practitioner channel, generating annualized consolidated revenues of approximately US$40 million, nearly 90% of which comes from its three main supplement brands: Genestra, Unda and Pharmax. A fourth brand, CoreLab, is a jointly owned health food store brand. Approximately 65% of Seroyal’s business is in Canada and 35% in the United States. Atrium has made more than a dozen significant acquisitions in dietary supplements since 1999; Seroyal is one of the largest and will allow Atrium to surpass US$100 million in EBITDA, according to President and CEO Pierre Fitzgibbon. Atrium recently acquired Minami Nutrition, a European omega-3 supplement company. Atrium had 2009 revenues of $320 million.

Catterton leads investment in fresh fast food chain
An investment group led by Catterton Partners (Greenwich, Conn.) has acquired a controlling interest in Noodles & Company (Broomfield, Colo.). Terms were not disclosed, but Kevin Reddy will remain with the 120-person company as CEO, president and chairman, according to the Colorado Daily. Founded in 1995, Noodles operates 255 locations in 18 states. The fresh fast food chain posts nutritional and allergen information on its website, and its menu includes dishes of 400 calories. Noodles posted $192.7 million in 2009 revenue, up 65% from 2006, according to Inc. magazine's 2010 ranking of fastest-growing private firms. Catterton’s portfolio includes Sweet Leaf Tea, Van’s Foods, Naya Waters, The Nest Collective and Outback Steakhouse.

Jones Soda sells more shares to Glengrove
Jones Soda Co. (Seattle), a premium soda company known for edgy branding and marketing associated with extreme pro-sports, expects to close the sale of 1,783,481 shares of its common stock to Glengrove Small Cap Value, Ltd. for approximately $2 million. This follows a $1 million investment announced in October 2010 and $1.1 million in July 2010, also by Glengrove. Jones Soda intends to use net proceeds to fund new marketing programs, grow larger distributor and national retail accounts, and for working capital. In the first quarter ended March 31, 2010 Jones Soda reported a net loss of $2.1 million, which declined to a reported net loss of $1.6 million in the second quarter. “We are in the process of overhauling our sales organization and bringing in proven leadership to strengthen our wholesale and retail execution. This will support our core brands at retail and we believe will lead to important market share gains in the future,” commented President and CEO William Meissner.

Canadian dairy cooperative buys Main Street Ingredients
Agropur, Canada's $3.4 billion dairy cooperative, has acquired Main Street Ingredients (La Crosse, Wis.), a developer of functional food ingredients to the dairy, nutritional and food industries. The operation will continue under the name Main Street Ingredients and will be overseen by the current president, Bill Schmitz, who will report to Agropur’s vice president of sales for Cheese and Functional Products Division.

Beaverton buys Wasabi Grower
Pacific Farms (Florence, Ore.), a wasabi growing operation, has been acquired by Beaverton Foods (Hillsboro, Ore.), the maker of Beaver, Inglehoffer and Napa Valley mustards. Roy Carver III started Pacific Farms in 1991 when he imported fresh Wasabi plants from Japan to see if they could be grown successfully in the United States. After five years of R&D, Pacific Farms harvested its first test crop. By 1995, it was growing Wasabi plants in a nursery for planting in its re-circulating hydroponics system. Today the company ships fresh wasabi and wasabi paste to restaurants, food distributors and individuals throughout North America. Beaverton Foods is a family owned business founded in 1929.

Frutarom acquires Rieber; Targets $1 billion in four years
Frutarom Industries Ltd. has agreed to acquire Rieber Industrial Spices Savory and its fixed assets (Rieber) from Rieber & Søn ASA of Norway for approximately $4.2 million. Rieber’s 2010 revenues are expected to total $6.3 million. Rieber’s product line includes flavors, seasoning compounds, and functional ingredients, with a specialization in the processed meat, fish, and convenience food sectors. Rieber serves leading food manufacturers located mainly in Scandinavia. The business is “highly synergetic with Frutarom’s current savory competencies in Europe which have grown significantly in recent years following the acquisitions of the savory activity of Chr. Hansen, Gewurzmuller and Nesse in Germany (acquired in 2009, 2007 and 2006 respectively),” stated Frutarom. According to President and CEO Ori Yehudai, strategic acquisitions and internal growth will double Frutarom’s turnover within the next four years to $1 billion.

TSG Consumer Partners invests in online cosmetics company
E.L.F. Cosmetics has raised an undisclosed amount from TSG Consumer Partners, yielding the private equity investor a minority stake. Founded in 2004 by a father and son team, EyesLipsFace (e.l.f.) was founded on the premise that premium cosmetics should not be limited to prestige retailers but made available to women on a budget. The company started out selling on line and has built an online community and social networking sites where consumers can view web videos on makeup techniques and communicate with the company and other e.l.f. users. E.L.F. is also deepening distribution at major retailers such as Target and Dollar General, in addition to broadening its international business. TSG’s other personal care investments include Alterna hair care, NV Perricone skin care and Pevonia skin care. Past investments include Smashbox Cosmetics, acquired by Estée Lauder in 2010, and Pureology hair care, acquired by L’Oreal in 2006.