Cork-based probiotics company acquired for €80m

Danish biotechnology group Novozymes has acquired a Co Cork probiotics company for €80 million as it looks to expand its business in the area of biological solutions for oral and gut health.

The deal will see the Nasdaq-listed and Copenhagen-based company acquire PrecisionBiotics on a cash and debt-free basis. The transaction is structured with the addition of an earn-out model, meaning that the sellers of the business stand to gain based on the performance of the company post-acquisition.

PrecisionBiotics, founded more than 20 years ago, has more than 230 patents across multiple probiotic strains. Key products include Alflorex, which reduces the main symptoms of irritable bowel syndrome, and Zenflore, which is in research and development for the management of stress.

Company shareholders include University College Cork, Enterprise Ireland and venture capital firm Seroba Life Sciences. According to shareholder returns for the 2018 financial year, chief executive and co-founder Barry Kiely is the single largest shareholder in the company with 11 per cent. That suggests that he stands to gain at least €8.8 million from the sale.

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“By becoming a part of Novozymes, we will get a global presence across businesses and new capabilities within science and discovery of new strains. This will help us to grow by developing new products where we can combine enzymes and probiotics,” said Mr Kiely.

Human probiotics

Novozymes said the deal will give the company broader access to the consumer health market and, more specifically, an entry into the human probiotic supplement market which is worth about €5 billion.

PrecisionBiotics had revenue of more than €13 million last year “with solid margins and positive free cash flow”.

"We welcome employees in PrecisionBiotics Group to Novozymes," said Ester Baiget, president and chief executive of Novozymes.

“PrecisionBiotics Group brings in complementary technologies, a similar science-based approach and a matching culture.”

Novozymes, which last year had revenue of 14.3 billion Danish krone (€1.9 billion) and net profit of 3.15 billion Danish krone (€422 million), said the deal will increase its earnings per share by 2022.

“Novozymes is a strong company based on science with a global market presence and a purpose to find biological solutions for better lives in a growing world. We look forward to speeding up the development of our pipeline and to a global rollout of products to accelerate growth,” Mr Kiely said.