Verdane realises investment in Kappa Bioscience, after seeing EBITDA quadruple during three-year hold
Verdane, the European specialist growth equity investor, has announced the realisation of its investment in Kappa Bioscience (“Kappa”) a leading science-based producer of specialty vitamin K2 for the human nutrition industry, to Balchem Corporation (NASDAQ:BCPC), a global specialty ingredients company focused on nutrition and health. Kappa has seen revenues more than double and EBITDA quadruple during Verdane’s ownership, and the company is now a global market-leading producer of vitamin K2 for the food supplements market.
Vitamin K2 is a fast-growing specialty vitamin that plays a crucial role in the human body for bone health, heart health, immunity, and athletic performance. Primarily, vitamin K2 supports the transport and distribution of calcium in the body. Vitamin K2 is important at all life stages, from pregnancy and early life to healthy aging. Kappa’s K2VITAL® branded vitamin K2 is the leading synthetic vitamin K2 and is backed by strong intellectual property and a deep clinical research portfolio. Kappa has seen rapid growth over the past ten years and is today a global leader in K2 manufacturing, with a strong European and US platform.
Verdane invested in Kappa in 2019, after having followed the company since 2009. The investment hypothesis was based on three core pillars: a) the vitamin K2 market is a structural growth market that will continue to grow fast; b) Kappa would be able to retain global leadership in the niche; and c) the strength of Kappa’s IP, know-how and cost leadership would ensure continued strong margins.
Post investment, Verdane has worked closely with the company to develop and accelerate the growth of the business, strengthening Kappa’s leadership in key areas, including marketing and operations, and supporting its organisation and subsequent commercial breakthrough in the US market. Verdane has drawn on its deep experience in establishing US operations for European businesses, and enabled Kappa to benefit from Verdane’s ecosystem and expertise in areas such as digital marketing and sustainability.
Bjarne Kveim Lie, Co-Founder & Managing Partner at Verdane, said: “We are thrilled and impressed by what the team at Kappa has been able to achieve during our partnership. To grow at such pace with such high quality, while also expanding geographical footprint and constructing a new advanced manufacturing facility for the years to come, is no small feat. We have worked closely with the company through this critical phase of its growth journey, and we are proud of our joint achievements. Balchem is a great strategic fit for the company, and I am confident Kappa will continue to succeed during new ownership.”
Egil Greve, Kappa Bioscience President & CEO, said: “The past three years have been transformative for Kappa, and we are proud and grateful to have partnered with Verdane, who had a different approach to most other PE houses in supporting our business. Their in-house operational experts provided strategic and operational support on high priority projects to elevate performance and help our growth. We are excited to join Balchem, a market leader in human nutrition and health and a science-driven company that aligns well with our vision to improve the quality of life for all. It has been a pleasure to work alongside the Verdane team, and we would like to thank them for their support since 2019.’’
Verdane’s realisation of Kappa is the third in Edda I, following the realisations of HYMA and Scanmarket.
Balchem is acquiring Kappa for an enterprise value of NOK 3.175B (approximately USD 338M). This transaction represents an EV/EBITDA multiple of 18x based on the 2022 forecast EBITDA. Kappa’s forecast 2022 revenues are approximately NOK 500M (approximately USD 53M) with a strong growth and margin profile.
The transaction closing is subject to the completion of customary closing conditions.
Verdane is a specialist growth equity investment firm that partners with tech-enabled and sustainable European businesses to help them reach the next stage of international growth. Verdane can invest as a minority or majority investor, either in single companies or through portfolios of companies, and looks to deploy behind three core themes; the Digital Consumer, Software Everywhere and Sustainable Society. Verdane funds hold over €4 billion in total commitments and have made over 135 investments in fast-growing businesses since 2003. Verdane’s team of over 100 investment professionals and operating experts, based out of Berlin, Copenhagen, Helsinki, London, Oslo and Stockholm, is dedicated to being the preferred growth partner to tech-enabled and sustainable businesses in Europe.
More info: www.verdane.com
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About Kappa Bioscience
Kappa Bioscience AS was founded in Oslo, Norway, in 2006 following a game-changing discovery: The synthesis of pure, all-bioactive vitamin K2 MK-7, an essential vitamin needed to direct calcium around our bodies and keep hearts, bones, and lots of other things healthy. Today, that pioneering spirit is still as strong as ever. With patented processes, innovative technology, and renowned expertise, Kappa Bioscience AS produces K2VITAL® and K2VITAL® Delta; vitamin K2 with unmatched purity and stability, in a wider range of formulations than anyone else, to bring the best possible benefits of vitamin K2 to everyone.
From vitamin K2 and turn-key solutions to research and marketing initiatives, to product launches and growth strategies, Kappa Bioscience AS believes in doing it right. That means developing products and services that set new standards of excellence, made with integrity, and through close collaboration. Together with its partners, Kappa Bioscience AS is helping the health and nutrition industry turn a corner, without cutting corners.
About Balchem Corporation
Balchem Corporation develops, manufactures and markets specialty ingredients that improve and enhance the health and well-being of life on the planet by providing state-of-the-art solutions and the finest quality products for a range of industries worldwide. The company reports three business segments: Human Nutrition & Health; Animal Nutrition & Health; and Specialty Products. The Human Nutrition & Health segment delivers customized food and beverage ingredient systems, as well as key nutrients into a variety of applications across the food, supplement and pharmaceutical industries. The Animal Nutrition & Health segment manufactures and supplies products to numerous animal health markets. Through Specialty Products, Balchem provides specialty-packaged chemicals for use in healthcare and other industries, and also provides chelated minerals to the micronutrient agricultural market.
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