Royal DSM N.V., the global Life Sciences and Materials Sciences company headquartered in the Netherlands, today announces an agreement to acquire The Polymer Technology Group, Inc. (PTG) of Berkeley (California, United States). Through the acquisition of privately-held PTG, DSM obtains a leading position in the field of biomedical polymers, one of DSM’s future key growth areas.
The acquisition is subject to regulatory approvals and is expected to close in Q2 2008. The acquisition price, which will not be disclosed as agreed between the parties, consists of a payment at closing and an earn-out. The earn-out will be due in the event that certain sales and profit growth targets are realized. The transaction price (including the earn-out) will be about 10 times EBITDA.
In 2008 PTG expects to realize approximately USD 40 million in net sales with an above average operating profit margin. PTG expects more than 20% annual sales growth in the next 3-5 years, based on existing business and the pipeline of new products.
The acquisition of PTG is an important step for DSM in realizing its ambitions in Biomedical Materials, one of the Emerging Business Areas defined in DSM’s Vision 2010 strategy. Being active in both Materials Sciences and Life Sciences, DSM is in a unique position and can combine its abilities in both market segments resulting in new, innovative products that address societal needs in this particular case in healthcare.
DSM sees promising potential in the cross-fertilization between Life Sciences and Materials Sciences. With already an established presence and a broad portfolio of products and services for the healthcare industry, DSM aims to establish over € 100 million in sales by 2012 in the Biomedical Materials market of which PTG will contribute a significant part.
Feike Sijbesma, Chairman of the Managing Board of DSM, commented: “In our strategy Vision 2010 – Building on Strengths we have highlighted the many opportunities we see in the cross-fertilization of our expertise in Life Sciences and Materials Sciences. The biomedical market is an excellent area to display the benefits of DSM’s combined abilities. The acquisition of PTG is an important step in the execution of this strategy.”
Steve Hartig, President DSM Biomedical added: “Through the acquisition of PTG DSM Biomedical gains a leading global position in the fast growing biomedical materials market. Our collective technology in combination with our expanded geographical and customer base will help us to develop a unique portfolio of products for the medical device industry.”
Founded in 1989, PTG is a market leader in bringing new specialty chemicals and polymer-based solutions to critical, material-intensive applications in the medical field. Some of the many uses for these materials include pacemakers and neural stimulation leads, contact lenses, orthopedic implants, catheters and implantable sensors. PTG’s products are widely used by leading medical device companies in both short and long-term devices, several of which have received approval from the US Food and Drug Administration. Its pipeline of new products is built on a strong, proprietary technology platform securing future growth of its business and allowing for strong synergies with DSM’s activities in this expanding market. The company has about 100 employees.
Bob Ward, one of the founders of PTG, is widely recognized as an innovator and eminent scientist in the field of biomedical materials. As far back as in the 1970’s, Ward has driven the development of novel biomedical products that have significantly benefited mankind. He will continue in his position as President/CEO of PTG after the acquisition.
Posted April 28th,2008