Balchem to acquire Kappa Bioscience for enterprise value of $338M

Jun. 14, 2022 7:34 AM ETBalchem Corporation (BCPC)By: Khyathi Dalal, SA News Editor
  • Balchem (NASDAQ:BCPC) signed a definitive agreement to acquire Oslo, Norway-headquartered Kappa Bioscience, science-based manufacturer of specialty vitamin K2 for the human nutrition industry.
  • Vitamin K2 is a fast-growing specialty vitamin that plays a crucial role in the human body for bone health, heart health, immunity, and athletic performance.
  • Balchem is acquiring Kappa from majority owner Verdane Edda for an enterprise value of $338M; transaction represents an EV/EBITDA multiple of 18x based on the 2022 forecast EBITDA.
  • Acquisition is financed through Balchem's existing revolving credit facility and cash on hand.
  • "Balchem's strength in U.S. will further accelerate the growth of Kappa’s vitamin K2 platform in that key market. At the same time, Kappa provides Balchem with increased access to European markets," Kappa Bioscience President & CEO Egil Greve commented.
  • Kappa’s forecast 2022 revenues are ~$53M with a strong growth and margin profile.
  • The transaction is expected to be accretive to Balchem’s EPS in 2022 on an adjusted basis and Kappa will be included in Balchem’s Human Nutrition and Health business segment.
  • In addition to the purchase price, the sellers have an opportunity to receive an additional payment in 2024 of 0% to 16% of the enterprise value based on growth and other performance targets.

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