Novozymes to acquire Philom Bios Inc., Canada
Today Novozymes Biologicals Holding A/S, a wholly-owned subsidiary of Novozymes A/S, (“Novozymes”), has signed a pre-acquisition agreement with Philom Bios Inc. (“Philom Bios”),
whereby Novozymes has agreed to offer the shareholders of Philom Bios CAD 6.50 per share in cash. This represents a total equity value of approximately CAD 25.6 million (DKK 138 million¹), corresponding to an enterprise value to sales multiple of approximately 2.0, based on 2005/06 sales. The offer includes outstanding stock options. Novozymes does not currently hold any stake in Philom Bios.
Philom Bios’ board of directors unanimously recommend that the shareholders accept the offer, which is subject to certain limited conditions normal in a transaction of this nature including the approval of Philom Bios’ shareholders. Shareholders representing more than 70% of the outstanding Philom Bios shares have irrevocably agreed to support and tender their shares to Novozymes.
Philom Bios was founded in 1980 and is located in Saskatoon, Canada. The company develops, manufactures and sells proprietary microbial inoculants to the agricultural industry. Philom Bios’ microbial products stimulate the growth of crops by enhancing the absorption of nitrogen and phosphorous in a natural way. The company employs 75 people and had a turnover of CAD 12.4 million (DKK 66.8 million (Exchage rate 1 CAD = 5.39 DKK, Ock. 29, 2007)) for the year ended September 30, 2006. The company has been profitable for the last 10 years. Philom Bios is a reporting issuer in the Province of Saskatchewan but is not listed for trading on any exchange.
Strategic rationale and synergies
A successful acquisition of Philom Bios will enhance Novozymes’ future activities within the growing bio-agricultural market and will also be a good strategic match seeing that both companies have competencies within microbial fermentation.
Conditions to and further terms to the offer
This transaction is subject to the fact that at least 67% of Philom Bios’ outstanding shares are tendered to the bid. Novozymes has already secured more than 70% of the shares. The transaction is expected to be closed in December 2007.
Financial impact on Novozymes’ result
A successful acquisition of Philom Bios is expected to have an insignificant impact on Novozymes’ sales and EBIT in 2007. Consequently, the financial guidance for 2007 remains unchanged following the transaction. The acquisition will support the long-term sales growth projection of 10% per annum for Novozymes’ microorganisms business. The EBIT margin is expected to be at level with the long-term financial expectations within a couple of years. However, initially financials will be impacted by the transaction costs.
Novozymes will finance the transaction from existing financial resources available to the company.
This news release contains “forward-looking statements” within the meaning of applicable securities laws relating to the proposal to acquire Philom Bios Inc., including statements regarding the terms and conditions of the proposed transaction. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with a transaction, that the ultimate terms of the transaction will differ from those that currently are contemplated, and that the transaction will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The statements in this news release are made as of the date of this release. We undertake no obligation to comment on analyses, expectations or statements made by third parties in respect of Novozymes, its financial or operating results or its securities.