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Dutch firm buys Fortitech for $634M

Thursday, November 8, 2012
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New owners


Construction of a distribution center for Fortitech, a global company headquartered in Schenectady, is pictured from 2008.
Photographer: Marc Schultz
Construction of a distribution center for Fortitech, a global company headquartered in Schenectady, is pictured from 2008.

— Schenectady will play a crucial role in the future operations of Netherlands-based life and material sciences company Royal DSM, which announced Thursday the $634 million acquisition of Fortitech.

Fortitech, a privately held manufacturer of nutrient mixes and additives, employs 520 people across the globe but has nearly half of its workforce at its Schenectady headquarters and Glenville distribution facility.

Company spokesman Rich Schleif declined to specify exactly what the acquisition means for its 200 local employees and local operations but said Schenectady will be a “very important part of the overall operation moving forward.”

Press release

To read the press release on the sale, click here.

“Unfortunately, due to antitrust government regulations, we can’t release any details at this time,” he said in a phone interview Thursday.

The cash sale is expected to close before the end of the year, subject to customary conditions. Fortitech is expecting $270 million in net sales next year, with earnings before interest, taxes, depreciation and amortization of about $70 million.

The company was founded in Rotterdam in 1986, where it operated for nearly 10 years until moving to Schenectady’s Riverside Technology Park off of Maxon Road Extension.

In 2009, it invested about $4 million in a 48,000-square-foot distribution center at the Schenectady County Airport in Glenville. It was the first business to move there, and it bought 23 acres from the county for $1 million. In turn, the county constructed a road connecting that site to Route 50.

Today, Fortitech boasts manufacturing and operations, sales, distribution and services offices and regional sales locations throughout Europe, the Asia-Pacific region, South America, Mexico and California.

Fortitech will continue to develop and manufacture food and beverage ingredient blends, which have seen great demand over the years in the nutrient-fortified bottled water market.

Schleif said the acquisition allows Fortitech to offer greater value to customers than it could have on its own.

As part of DSM, Fortitech will help advance the company’s goal to develop and provide a broad range of customized food ingredient blends.

“Our combined global capabilities deliver a deeper and more comprehensive resource for providing our customers with innovative customized products,” Fortitech President and CEO Walter Borisenok said in a news release. “Together, we boast a brighter and stronger scientific research database and unsurpassed technical excellence that will enable us to bring superior value to our products and services.”

DSM is the world’s largest producer of vitamins and supplies nutritional and pharmaceutical products in global markets in the food and dietary supplements, personal care, medical devices and alternative energy fields. It has headquarters in Heerlen, Netherlands, and annual net sales of about $9 billion.

Fortitech has long been considered a leader in several DSM industries, including food and beverage, infant nutrition and dietary supplements. DSM cited its “highly responsive and flexible” customer service model as one reason behind the purchase.

Leendert Staal, president and CEO of DSM Nutritional Products, said in a news release that he looks forward to welcoming Fortitech employees to his company.

“The acquisition of Fortitech will help us to expand our value chain presence and to deliver more value to our customers,” he said. “With Fortitech and its workforce, DSM will be able to deliver customized food ingredient premixes and blends to our customers while at the same time strengthening our international footprint.”

DSM employs 22,000 around the world, mainly in Europe, Asia and North America but also in South America, Australia and Africa. It has 11 business entities that range from food specialties to resins to engineering plastics to bio-based products and services.

DSM Nutritional Products has three components: animal nutrition and health, personal care and human nutrition and health. That third component, which will absorb Fortitech operations, produces bulk vitamins, carotenoids, custom nutrient blends and nutraceuticals.

Fortitech marks the ninth acquisition in the DSM Nutritional Products cluster, which has a presence in more than 100 countries and has experienced $2.4 billion worth of growth in just more than two years.

“This acquisition fully fits DSM’s strategy as we continue to create value for all stakeholders by providing innovative, sustainable solutions to the world’s greatest current and future challenges,” said DSM Managing Board Chairman Feike Sijbesma in the release.

DSM officials could not be reached for additional comment Thursday.

 
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