Balchem acquires vitamin K2 specialist Kappa Bioscience eyeing EU market

15 Jun 2022 --- US-based Balchem is acquiring Norwegian Kappa Bioscience from Verdane Edda for 3.175B NOK (US$338 million – at the time of the acquisition). A definite agreement has been signed, and Kappa Bioscience will be part of the human nutrition and health business segment.

“Balchem has a strong presence in the US, which will further accelerate the growth of our vitamin K2 platform alongside its broader portfolio. In return, Kappa provides Balchem with improved access to key European markets,” Dominik Mattern, VP of marketing, Kappa Bioscience, tells NutritionInsight.

Kappa forecast revenues for 2022 of NOK 500M (US$53 million), expecting a “strong growth and margin profile.”

Financed by the existing revolving credit facility and cash held by Balchem, the acquisition transaction represents an EV/EBITDA multiple of 18x based on the 2022 forecast EBITDA. It is expected to accrue to the adjusted earnings per share for Balchem this year.

Vitamin K2 comes with several health benefits, described as essential to the industry and consumers.Acquisition motivations
Balchem focuses on specialty ingredients in nutrition and health. The company eyed Kappa Bioscience due to it being a science-based manufacturer focusing on Vitamin K2. 

“Vitamin K2 fits squarely with our strategic focus and vision of ‘making the world a healthier place.’ Kappa is the leader within its space and the only company offering a patented, 99.7% all-trans vitamin K2 as MK-7, identical to the bioactive vitamin K2 molecule found in nature,” says Ted Harris, chairman, CEO and president, Balchem.

Previously, Kappa has been setting a benchmark for the industry with their natural-identical vitamin K2 – K2Vital – described as a “Reference Standard for the United States Pharmacopeia.” 

Capitalizing on market opportunities
Researchers have previously highlighted the benefits of vitamin K2 and encouraged supplement consumption for children, as well as pregnant and lactating women. The study found that vitamin K2 consumption can “counteract the negative effects of prolonged medication” and is considered a treatment option.

“Modern, especially Western, diets simply do not provide enough vitamin K2, and many people are starting to develop vitamin K2 deficiency. Consumer awareness of what we used to call ‘the forgotten vitamin’ is increasing rapidly,” says Mattern. 

“Benefiting from both the personal wellness surge and a broader appreciation of the widespread benefits of vitamin K2 in healthy aging, this category continues its rise in popularity and growth.”

“In terms of market opportunities, vitamin K2’s synergistic effect with vitamin D3 opens up a whole untapped market for K2 providers. Health is the new wealth, and vitamin K2 plays a tremendous role in the nutraceutical space, which industry leaders can capitalize on.”

The effect of vitamin K2 is the activation of two proteins that balance calcium in the body, which is beneficial for bone and heart health. During the COVID-19 pandemic, Kappa Bioscience stressed the vital role of the supplement due to its immune-supportive benefits.

By Beatrice Wihlander