The Avignon-based company indicated that new acquisitions were on the cards last April, after having completed the integration of Pure World, which it bought for $37m (c €30m), in June 2005, six months ahead of schedule. Two months later it raised €13.2m for this purpose by issuing more than a quarter of a million new shares.
While Pure World gave the company a big leg-up in the US market (70 per cent of its sales now originate from the US) the latest move opens up considerable opportunities in pharmaceuticals.
Hammer has authorisation from the Italian Ministry of Health to produce ingredients for use in pharmaceutical products. On a European scale, Hammer has compiled European Drug Master Files (EDMFs) for its main plant extracts, such as valerian, St John's wort and horse chestnut, which authorise their use in finished pharmaceutical products.
Naturex CEO Jacques Dikansky told NutraIngredients.com that Naturex has worked on EDMFs for its own extracts, but since none of its facilities have had pharmaceutical approval Hammer's expertise in this area will prove a big asset.
In addition to leading Naturex into pharmaceutical territory, Hammer's EDMFs will benefit Naturex in the nutraceutical market. Dikansky said that nutraceutical companies are increasinly seeking out extracts with EDMFs.
From March 2011 all traditional medicinal product manufacturers will have to have EDMFs for their products in compliance with the Traditional Medicinal Product Directive (2004/24/EC).
Geographically speaking, Hammer also serves to fortify Naturex's presence in its home continent.
"As Hammer Pharma is ideally located at the heart of one of Europe's key industrial zones, the acquisition affords Naturex another strategic location and will reinforce the group's positioning on the German and Italian markets, which rank amongst the highest in Europe, on which Hammer Pharma is a player," said Dikansky.
No firm figures has been put on the European plant extracts market, but it is well known that Italy and Germany figure large. Dikansky's estimate puts them at between 10 and 20 per cent overall.
Hammer Pharma's 25,000 square metre facility has the capacity to extract over 3,500 tons of raw material each year. The company, founded more than 50 years ago, had a turnover of €7.8m in 2006 and EBITDA of nearly €0.9m.
Naturex is financing €6m of the transaction in cash and €4m through company debt.
This leaves a slice of the funds released by the share issue available for an additional acquisition, and Dikansky confirmed that the company continues to evaluate possibilities.
"We hope to conclude another this year," he said.
In the first half of 2006 Naturex reported sales of €34.66m with constant dollar rate and operating profit of €3.91m - 85.4 per cent and 76.1 per cent increases over the same period of 2005 respectively.
Full year results will be released at the end of this month.