Martek Biosciences Corporation is to buy docosahexaenoic acid (DHA) producer OmegaTech, giving it a further foothold in the growing market for fortified foods. Martek said it would become the world leader in fermentation-derived DHA as a result of the acquisition.
Martek will pay for the acquisition with around 1.8 million of its own common stock with a current market value of approximately $50 million (€57.1m). An additional maximum amount of 1.4 million shares having a current market value of approximately $40 million will be payable over the next two years if four milestones are met, the company said. Two milestones are tied to sales and gross profit margin objectives, and two relate to regulatory and labelling approvals.
"OmegaTech's low-cost, patented source of DHA, talented workforce and experience in the food, beverage and nutrition fields make it an excellent complement to Martek," stated Henry Linsert Jr., chief executive officer of Martek. "The acquisition of OmegaTech provides Martek access to the anticipated $1 billion global food and beverage DHA market."
The deal will also be good for OmegaTech. Company president & CEO Mark Braman said that the deal would add incremental revenue streams and allow the company to penetrate new markets, while the combination of Martek's expertise in infant nutrition and OmegaTech's technology and experience in the food and nutrition industries would allow Martek to become a leading provider of vegetarian DHA products for both the infant formula and adult markets.
OmegaTech has been in business since 1987 and has over 100 issued and pending patents protecting its DHA technology. It has approximately 50 employees and currently sells its DHA throughout the world into the human and animal nutrition sectors.
Martek develops, manufactures and sells products from microalgae, and its products include speciality nutritional oils for infant formula, and nutritional supplements and functional food ingredients targeting mental and cardiovascular health and the development of the eyes and central nervous system in newborns.