Martek Acquiring OmegaTech

COLUMBIA, Md.--Martek Biosciences Corp. (NASDAQ:MATK) signed a definitive agreement to acquire Boulder, Colo.-based OmegaTech Inc. in exchange for approximately $90 million in Martek stock. The stock-for-stock transaction is expected to close within four to six weeks. This is Martek's first DHA-business acquisition.

Over the last several years, OmegaTech has financed the company through private equity rounds and steadily moved toward the IPO market. "This time on that track, we had a great deal of interest expressed on the M&A front," reported Mark Braman, president and chief executive officer (CEO) of OmegaTech. "We have been very well aware of Martek over the years and this was just, in our opinion, the most attractive route for OmegaTech."

According to Martek CEO Henry Linsert Jr., "OmegaTech's low-cost, patented source of DHA, talented workforce and experience in the food, beverage and nutrition fields make it an excellent complement to Martek." He added that this acquisition will better position Martek in the DHA market, with a worth projected to reach $1 billion.

Once OmegaTech becomes Martek Biosciences, it will continue to operate out of Boulder as well as Columbia, Md., and Kingsport, Ky. In addition, OmegaTech will keep its customer base in the food, beverage and nutrition market. "In the acquisition of OmegaTech, all of the key programs will continue forward," Braman stated. "Like any merger of two companies, we are looking for any areas of overlap and synergy. In the next three to four weeks, we'll be looking more closely at the overall organization [caused by the merger] and what various employee roles will be going forward."

Up front, the purchase price of the acquisition is approximately 1.8 million shares of Martek common stock, currently valued at around $50 million. Depending on if certain Martek goals are met, an additional 1.4 million shares, with a current market value of $40 million, will be paid over the next two years to OmegaTech. The four stock-dependent goals involve sales and gross margin objectives as well as regulatory and labeling issues.

Four OmegaTech (www.omegadha.com) executives will become officers at Martek (www.martekbio.com). Braman will become executive vice president of Martek; Vice President of Research and Development James Flatt will become senior vice president of research and development; Vice President of Operations Robert Driver will become vice president of manufacturing; and Vice President of Corporate Development, Secretary and General Counsel Robert Di Scipio will become vice president and associate general counsel.