DSM will acquire the flavor and fragrance (F&F) bio-based intermediates business of Amyris for an upfront consideration of US$150 million. 

The deal will add seven intermediate products to DSM’s existing personal care and aroma ingredient activities, extending its offerings in bio-based ingredients for the F&F and cosmetics industries.

“We extend the offering to help our flavor and fragrance and cosmetics customers to improve their sustainability profile. These bio-based ingredients provide them with attractive and sustainable additional alternatives,” says Gareth Barker, president of DSM personal care and aroma ingredients. 

Terms of the deal 
Of the new intermediate products being added, four already generate meaningful sales and (Earnings Before Interest, Taxes, Depreciation, and Amortization) EBITDA. Two just launched and another one is under development.

The upfront consideration of US$150 million represents an estimated 15x EV/EBITDA 2021 multiple, according to the company.

Amyris will share in the EBITDA growth over the period 2021-2024 of certain activities, mainly in the products just launched or under development.

This will lead to additional earn-outs equal to 9x the realized EBITDA in 2024, which is estimated to result in a total earn-out amount of US$100-150 million.

DSM and Amyris will continue their R&D partnerships.

Creating impact for DSM
Acquiring the entire F&F business from Amyris now strengthens DSM’s biotechnology base with F&F intermediate products and increases the scale of DSM’s biotechnology activities in nutritional ingredients. 

It also broadens the company’s biotechnology-based offerings for its current F&F customer base. 

Lastly, the agreement will strengthen DSM’s sustainability profile further, as bio-based F&F ingredients offer additional alternatives to chemistry-based products as well as botanically sourced ingredients.

“A year of transformative execution”
This month Amyris reported robust growth in 2020, attributed to new launches and partnerships.  CEO John Melo reflected on the time period as “a year of transformative execution for Amyris.”

In 2017, DSM made an equity investment in Amyris. At the same time, the companies entered into a development cooperation focused on products for the global health and nutrition markets, including vitamins and other nutritional ingredients. 

In recent years DSM acquired Amyris’ farnesene business and technology for nutritional and F&F ingredients, as well as its biotechnology manufacturing facilities in Brotas, Brazil. DSM has been producing several F&F products for Amyris in this facility.