COPENHAGEN (Reuters) - Danish food ingredients maker Chr. Hansen (CHRH.CO) said on Wednesday it has agreed to buy Nutrition Physiology Company (NPC) for $185 mln and will cancel a planned share buy-back program and interim dividends in the financial year 2015/16.
Chr. Hansen wants to increase its presence in the microbial solutions for the U.S. livestock industry, it said in a statement.
“Through this acquisition we create a broader platform in probiotics that help farmers improve productivity and health through natural means,” Chief Executive Cees de Jung from Chr. Hansen said in the statement.
The company kept its profit outlook for 2015/16 ahead of its first quarter earnings report, that will be published on Thursday.
Chr. Hansen returned 197 million euros ($214 million) to shareholders in its previous financial year.
The acquisition will be funded through Chr. Hansen’s cash holding and current credit facilities. Net interest-bearing debt is expected to increase to around 1.8 times EBITDA (earnings before interest, taxes, depreciation and amortization) by the end of the financial year Aug 31, from 1.7 times at end of August last year.
Chr. Hansen will book 6 million euros in one-off costs related to the transaction but expects the new business will increase profit in the fiscal year 2016/17.
Shares in Chr. Hansen rose 2.75 percent on Wednesday, showing a gain of 360 percent since they were listed on the Copenhagen bourse in June 2010.
($1 = 0.9217 euros)
Reporting by Ole Mikkelsen; Editing by Elaine Hardcastle