FMC Corporation makes bold move into omega-3 market with $345m deal to buy Epax
The move is the latest in a series of mega-deals in the omega-3 space, following BASF’s acquisition of Pronova Biopharma and DSM’s acquisition of Martek Biosciences and Ocean Nutrition Canada, and shows FMC is putting its money where its mouth is after telling the market earlier this year it aims to expand its health & nutrition business, said FMC CEO Pierre Brondeau.
“Earlier this year, we committed to invest in our FMC Health and Nutrition platform by expanding participation in nutraceuticals and similar high growth markets.
“Today’s announcement underscores our commitment to this strategy and builds on our strengths in functional ingredients for the food and pharmaceutical markets. It also illustrates our resolve to meet or exceed FMC’s Vision 2015 growth goals through targeted acquisitions that complement our technology, business and financial priorities.”
Epax CEO: This sets the stage for us for the next 10 years
Under the deal, the senior management team at Epax will remain with the business, which makes premium grade omega-3 fatty acid concentrates primarily from anchovies for nutraceutical, pharma and food applications from cGMP facilities in Norway and the UK utilizing proprietary purification and concentration technologies.
While FMC has not got any omega-3 products in its current portfolio, it has considerable expertise in marine-sourced ingredients such as carrageenan, a long operating history in Europe, and a presence in high-value ingredients for the food and pharma markets, Epax CEO Ola Snøve told NutraIngredients-USA this morning.
It also has an emerging presence in the nutraceuticals market with its MaQBerry antioxidants from maquiberries; Nutraesterol unesterified phytosterols; Nutricol HN glucomannan (soluble dietary fiber); and Protasea Fucoidan brown seaweed extract, he said.
Snøve, who observed that Epax was “the last of the big omega-3 independents” in an interview with NutraIngredients at Vitafoods earlier this year, added that “while on the one hand it can be good to be small, the industry is consolidating and being part of a larger group can give you access to resources and capabilities that can drive innovation and the consumer education process.”
He added that FMC’s financial backing and global market access would help Epax realize its ambitions more rapidly.
“This sets the stage for us for the next 10 years.”
FMC ownership will open up new opportunities in food applications
While Epax has historically focused on the nutraceuticals market, there has been a steady convergence in the past couple of years with the pharmaceuticals market in the omega-3 space when it comes to quality standards and Epax is well-positioned to grow in both markets, he said.
While the food and beverage market has “not been a focus for Epax up until now”, FMC - which has strong contacts with major food and beverage industry players - will open up new opportunities in this space, he predicted.
“Obviously FMC brings a whole other dimension when it comes to [opportunities to incorporate omega-3 fatty acids into] food.”
Double digit growth
According to FMC, the market for the supply of omega-3 fatty acids is $2.1bn per year, projected to grow 12-15% annually driven by growing consumer awareness about cardiovascular, cognitive, and numerous other health benefits, supported by a large and rapidly-growing body of scientific evidence.
“For decades, FMC has been known in the pharmaceutical and food markets as a leader in functional ingredients—highly focused on customer needs, product quality and consistency, and customized innovation,”said Mike Smith, VP and global business director, FMC Health and Nutrition.
“This acquisition introduces a premium omega-3 fatty acid technology and brand to our portfolio of microcrystalline cellulose, alginates, carrageenan, pectin and other functional ingredients. We look forward to working with the Epax team to serve the market with an even broader portfolio of products, particularly in the high growth nutraceutical market.”
The players
In 2010, Epax was acquired by Trygg Pharma Group AS, a 50/50 joint venture between krill oil expert Aker BioMarine AS, and private investment firm Lindsay Goldberg.
As a part of the deal with FMC - which has acquired all of the shares of Epax Nutra Holding III AS (Norway) and Epax UK Holding III AS (UK) - FMC has entered into a long-term supply agreement with Trygg Pharma to provide Trygg with high-concentration Omega-3 fish oil for use as an active pharmaceutical ingredient.
FMC, which is a diversified chemical company serving agricultural, industrial, environmental, and consumer markets, generated revenues of $3.7bn in fiscal 2012 and employs 5,700 people throughout the world.
It has four segments: FMC Agricultural Solutions, FMC Health and Nutrition, FMC Minerals and FMC Peroxygens.
Click here for our interview with Mike Smith, vice president and global business director at FMC Health and Nutrition.
