DSM Boosts Food & Beverage Enzymes with First Choice Buy
DSM has agreed to acquire First Choice Ingredients, a US manufacturer of fermented dairy and savory flavorings for taste and functional activities in a variety of food and beverage applications. The transaction – at an enterprise value of $453 million – is expected to close in the final quarter of 2021.
Headquartered in Germantown, Wisconsin, First Choice has three manufacturing facilities in the area and employs approximately 100 people. The company expects to post sales of about $75 million and adjusted EBITDA of $23 million in 2021.
Offering close to 500 different products, First Choice ferments and blends various natural dairy products with cultures and enzymes to create ‘clean label’ taste ingredients that are used in products such as soups, snacks, salad dressings and sauces, prepared meals, sweet baking, as well as dairy products and plant-based meat and dairy alternatives.
Clean label means making a product using as few ingredients as possible, as well as using those that are easily recognizable with no artificial ingredients or synthetic chemicals.
DSM views the acquisition as highly synergistic for both companies. The Dutch group can further accelerate First Choice’s growth by integrating its solutions into its own food and beverage products while also offering its products to DSM’s customer base.
For First Choice, the deal gives it access to DSM’s biotechnology toolbox and fermentation knowhow along with the opportunity to expand in new end-markets with future growth potential, such as plant-based alternatives, as well as in markets outside the US.
“This acquisition is an attractive next step for DSM as we continue to build our health, nutrition, and biosciences capabilities,” said DSM co-CEOs Geraldine Matchett and Dimitri de Vreeze, describing the companies as a “great fit.”
The Dutch group noted that First Choice had achieved high single-digit annual average sales growth for the past five years, and expects this to continue going forward.
Author: Elaine Burridge, Freelance Journalist
