Balchem has agreed to acquire Kappa Bioscience

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Balchem Corportation (New Hampton, NY) has signed a definitive agreement to acquire Kappa Bioscience AS (Oslo, Norway), a manufacturer of K2Vital branded vitamin K2 which can be used in human nutrition applications to support bone health, heart health, immunity, and athletic performance.

“We are thrilled to welcome Kappa Bioscience’s strong and experienced team to Balchem. This acquisition accelerates our strategy to expand our portfolio of science-based specialty nutrients with leading positions in growing markets,” said Ted Harris, chairman, CEO and president of Balchem, in a press release. “Vitamin K2 fits squarely with our strategic focus and our vision of ‘making the world a healthier place’. Kappa is the leader within its space and the only company offering a patented, 99.7% all-trans vitamin K2 as MK-7, identical to the bioactive vitamin K2 molecule found in nature. We believe the combining of our two companies will strengthen our scientific and technical expertise, geographic reach, and marketplace leadership while ultimately leading to accelerated growth for both companies’ portfolios.”

“We are extremely excited to join Balchem, a market leader in human nutrition and health and a science-driven company that aligns well with our vision to improve the quality of life for all,” said Egil Greve, Kappa Bioscience president and CEO. “Our partners can expect continued expert knowledge, scientific excellence, product safety and quality, and customer service as we further strengthen these areas together with Balchem. Our two companies are very complementary to each other. Balchem’s strength in the United States 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. Both companies share a passion for science-based nutrition solutions while operating to the highest integrity and doing it right.”

Balchem is acquiring Kappa from majority owner Verdane Edda for an enterprise value of NOK 3.175 billion (approximately USD 338 million). This transaction represents an Enterprise value(EV)/Earnings before interest, taxes, depreciation, and amortization (EBITDA) multiple of 18x based on the 2022 forecast EBITDA. The forecast of Kappa’s 2022 revenues are approximately NOK 500 million (approximately USD 53 million) with a strong growth and margin profile. In addition to the purchase price, Kappa has the opportunity to receive an additional payment in 2024 of 0% to 16% of the enterprise value based on growth and other performance targets.