Dutch Take Brazilian Animal Supplement Maker

Dutch vitamin maker Royal DSM has agreed to acquire Tortuga, a privately-held Brazilian animal nutritional supplement company, for EUR465m ($575m) cash, it says. The move is another example of a European diversifying in to higher-growth markets, as DSM tries to realign its portfolio towards emerging economies. An adjustment can be made to the purchase price bringing the total to as much as EUR490m, based on the actual 2012 Ebitda results and using the same multiple, DSM says. The deal comes at about 7.75x Ebitda multiple, based on 2012 estimated sales, according to a source familiar with the company. “If they’re going to generate value off of this, they’re going to need strong synergies, top and bottom line,” he says, noting that DSM’s nutrition segment earns 20% margins while Tortuga’s earns 16%. The company still has significant funds on its balance sheet that it doesn’t rule out using for further buys, he adds. The purchase is DSM’s seventh globally since a September 2010 change in strategy to focus on growth in its nutrition segment, the company says. The transaction is expected to be immediately earnings per share accretive, DSM says. Tortuga makes mineral supplements for production animals, selling in over nine countries in LatAm.