The Netherlands-based health and nutrition giant will purchase the business' seven bio-based intermediate products for €128m ($150m) to add to its existing Personal Care & Aroma Ingredients portfolio.
Of the seven products purchased, four are already generating meaningful sales and EBITDA, two have just launched and one is under development.
The transaction, expected to close today, will see DSM acquire the business for an upfront consideration of US$150m, which represents an estimated 15x EV/EBITDA 2021 multiple.
Amyris will share in the EBITDA growth over the period 2021-2024 of certain of the activities (mainly the products just launched/ under development), receiving additional earn-outs equal to nine times the realised EBITDA in 2024, which is estimated to result in a total earn-out amount of US$100-150m.
The two firms will also continue their R&D partnerships. They have been working together since 2017 when DSM acquired Amyris' Farnesene business and technology for nutritional and F&F ingredients, as well as its biotechnology manufacturing facilities in Brazil. DSM has been producing several F&F products for Amyris in this facility.
Acquiring the entire F&F business now allows DSM to strengthen its biotechnology base with F&F intermediate products and increase the scale of its biotech activities in nutritional ingredients. The move will allow the firm to broaden its existing offerings in Aroma Ingredients with additional biotechnology-based products and it will strengthen the company's sustainability profile.
Gareth Barker, President DSM Personal Care & Aroma Ingredients, said: "We are pleased that we can extend the offering to our customers with an additional seven important intermediates that will 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."
Boosting sustainable profile
Biotechnology involves using designer microbes at industrial scale and it has been a method of cosmetics and personal care ingredient production for over a decade.
Biotech ingredients are made by microbes, often bacteria or yeast or algae that have undergone DNA editing so that their metabolic process will result in a commercially viable molecule. Once a sample of the microorganism is acquired and edited, ingredient makers typically keep and propagate the edited microbes in a library of sorts so there is no need to replenish from any outside source.
This method of production is often cleaner, more sustainable, and more efficacious when compared to beauty ingredients sourced from petrochemicals or those sourced directly from cultivated or wild plant and animal sources.
As Amyris states on its website: "Our biotechnology platform uses fermentation to sustainably and cost-effectively create natural oils and aroma chemicals for large beauty brands.
"Because our process allows us to decouple our production process from the price and supply volatility of natural oils and petroleum, we can continue to produce pure ingredients that smell good and are good for the planet."
Amyris launched its Biossance skin care collection in 2017, showcasing how biotech can be used to make beauty product formulations inspired by nature and streamlined by cutting-edge technologies.
Biossance is built around squalene, more precisely squalene manufactured using yeast fed with sugar cane. The company took its nature-via-science narrative seriously when choosing packaging too with "tree-free" outer cartons made of 100% sugarcane fibre.