FMC Acquires Omega-3 Producer Epax

PHILADELPHIAFMC Corporation acquired all shares of Epax, a manufacturer of omega-3 fatty acid concentrates used in nutraceuticals, pharmaceuticals and food.

Epax was part of Trygg Pharma Group AS, an omega-3 pharmaceutical company. This acquisition will help expand FMC's presence in the nutraceutical market. The transaction, valued at approximately USD $345 million, reflects a 2013 EBITDA (earnings before interest, taxes, depreciation and amortization) multiple in line with FMC's current trading multiple. The company expects earnings to grow immediately.

"Earlier this year, we committed to invest in our FMC health and nutrition platform by expanding participation in nutraceuticals and similar high growth markets," said Pierre Brondeau, FMC president, CEO and chairman. "Today's announcement underscores our commitment to this strategy and builds on our strengths in functional ingredients for the food and pharmaceutical markets." Bondeau said the acquisition will help the company meets its Vision 2015 growth goals.

Epax uses proprietary purification and concentration production techniques that address the fast-growing market segments for high concentration omega-3 fatty acids. FMC's acquisition will include Epax's two world-scale production facilities in Alesund, Norway, and Seal Sands, U.K.

"This is an exciting time for our Epax business, employees and customers," said Ola Snove, Epax CEO.  "We believe FMC is the right owner to take this business forward, given its technological and manufacturing expertise with marine-sourced inputs, its long operating history in Norway and the U.K. and its strong foundation in high-value ingredients for the food and pharmaceutical markets. FMC's financial strength, global market access and commitment to growth will help accelerate our ability to serve the quality and reliability demands of our customers and consumers."

As a part of the overall transaction, FMC entered into a long-term supply agreement with Trygg Pharma to provide Trygg with high-concentration omega-3 fish oil as an active pharmaceutical ingredient.

The market for supply of omega-3 fatty acids is $2.1 billion per year, projected to grow 12 percent to 15 percent annually. Recent market research predicts omega-3 sales could hit $34 billion by 2016. Consumer awareness of cardiovascular, brain  and numerous other health benefits of omega-3s continues to drive strong demand, especially for high purity, highly concentrated products.