DSM has agreed to buy Austria’s Erber Group, comprising Biomin and Romer Labs, for an enterprise value of €980 million. Two smaller business units – Sanphar and EFB, which represent 7% of Erber’s total sales – are not included and will be carved out before the transaction closes.

Biomin and Romer Labs mostly specialize in mycotoxin risk management, gut health performance management and food and feed safety diagnostic solutions.

The businesses have combined sales of €330 million split between Europe, Asia and the Americas and will add 12 manufacturing sites and 15 R&D sites along with 1,200 employees to DSM’s footprint. Five of the sites are located in Austria, the other in Germany, the US, Panama, Brazil, China, Singapore and Vietnam.

Describing the acquisition as a “unique strategic opportunity,” DSM said it would provide revenue-enhancing synergies, a global customer base and complementary geographic strengths. It would also make the Dutch group the world leader in mycotoxin risk management and extend its position as one of the top suppliers in the rapidly growing animal gut performance management market.

Mycotoxins occur as a result of natural fungus contaminants in animal feed, threatening the health of both animals and humans. They also reduce the nutritional value of the feed.

Biomin is the market leader in the premium and advanced mycotoxin detoxifiers market as well as being a major producer of phytogenic and probiotic feed alternatives to antibiotics, complementing and strengthening DSM’s position in the eubiotics markets. The business will add three premix facilities to DSM’s network of about 50 locations around the world. Biomin’s Austrian plant, said DSM, will support growth in Central and Eastern Europe.

Romer Labs, a manufacturer of kits for food and feed safety diagnostics but also with several reference labs and ability to consult, has annual sales of €50 million and is growing at double-digit rates. According to DSM, the food and feed safety testing market is worth €4 billion and is growing at high single-digit rates.

“Biomin and Romer Labs will help strengthen and accelerate the growth of our specialty animal nutrition and health offering, including our big data and diagnostic capabilities, and it is exciting to be entrusted to take these family-founded businesses forward,” said Geraldine Matchett and Dimitri de Vreeze, co-CEOs at DSM.

The transaction is subject to customary closing conditions and is expected to complete in the fourth quarter of 2020.

Following completion, DSM expects integration of the businesses to take between 18 and 24 months. It added that, in due time, it will integrate its antibiotics residue testing business into Romer Labs, which will remain as a stand-along organization.

Separately, and as a consequence of both the Erber acquisition and the ongoing Covid-19 crisis, DSM has decided to cancel the remainder of its €1 billion share buy-back program, first announced on Dec. 14, 2019. To date, the company has purchased 6.6 million shares for a total sum of €745 million.