Vitamin maker Royal DSM makes $1.1 billion offer for Md.-based Martek
Tuesday, December 21, 2010; 7:22 PM
Martek, a Columbia-based maker of nutrients for baby formula and other products, said Tuesday that it has accepted a nearly $1.1 billion buyout offer from the world's largest vitamin supplier.
Martek's executives and board of directors have endorsed the deal, but it needs the approval of shareholders and regulators. Executives expect the transaction will close in the first half of next year.
The buyout offer from Netherlands-based Royal DSM equates to $31.50 a share of Martek, a 35 percent premium on the company's closing price Monday. The stock soared $8.31, or 35.6 percent, to close at $31.67 Tuesday after the offer was announced.
The deal will allow Martek to sell more of its products globally and will give DSM a larger footprint in the United States, the companies said in a statement. For the fiscal year that ended Oct. 31, Martek reported a profit of $27.9 million, a 31 percent decline from the year before.
"We are pleased that this transaction appropriately recognizes the value of Martek's nutritional ingredients, technology platform, market position and skilled workforce, while providing significant value to our stockholders," chief executive Steve Dubin said in a statement. "We have worked collaboratively with DSM for many years, and we are confident that they share our vision for Martek's future."
Founded 25 years ago, Martek has deep roots in the Maryland biotech community, and about 220 of its 525 employees work at its Columbia headquarters.
The company's flagship product, DHA, is an omega-3 fatty acid that is thought to improve brain and eye development in babies and to promote overall human health. The nutrient is added to nearly all infant formula in the United States and many international markets.
Martek has also expanded into other consumer products and brands, including food and beverages sold by Quiznos and Minute Maid. In February the company bought Amerifit, which develops and markets consumer health products, for $200 million.
Renee Winsky, chief executive of the Tech Council of Maryland, called the acquisition a win for the state's biotechnology industry. DSM's entry into the region will give the industry additional clout and another international partner with which to do business, she said.
"One could argue there is an even bigger player in town now when you add in the assets of this global company. . . . It makes [Martek] all the more powerful and our biotech community all the stronger," Winsky said. "One would hope that every biotech company in incubators in Maryland could be that lucky and that successful."