French biotech group Solabia has acquired an 80% stake in Israeli microalgae company Algatechnologies. Based on Kibbutz Ketura near Eilat, Algatechnologies develops, cultivates and markets ingredients produced from microalgae. No financial details were disclosed but market sources believe that the deal was agreed at a company valuation of $80-100 million.
Solabia Group, which produces natural ingredients for cosmetics and skincare, bought the 80% stake from UK private equity fund Grovepoint and the JCA Charitable Foundation (Baron Hirsch Fund ), while Kibbutz Ketura, which founded Algatechnologies, will remain with a 20% stake in the company.
Following the deal, Algatechnologies will become a focus of activities in ingredients for Solabia's food and food additives sector. The synergy between the companies will allow them to enjoy access to R&D capabilities, new marketing channels and a broad customer base.
Algatechnologies has pioneered the manufacturing of unique ingredients from microalgae on a large commercial scale. The company sells to more than 30 countries and to the leading brands in the food, food additives and cosmetics sectors. The company's factory covers 20 acres and includes over 600 kilometers of bio-reactors. Following the deal, all the company's employees will be awarded a bonus of at least NIS 20,000.
The controlling core in Algatechnologies (60%) was initially sold six years ago to the UK's Grovepoint investment fund. The balance of the shares then remained in the hands of Kibbutz Ketura). Since that previous deal, the factory has almost doubled in size and the workforce has tripled. Algatechnologies is one of the largest and most valued manufacturers of Astaxanthin - the strongest natural antioxidant, which is produced from various types of microalgae. Over the past year, the company launched (with the support of the Israel Innovation Authority and the Israel Investment Center) an additional product Fucoxanthin - designed for the metabolism and health of the liver. The company has a quality pipeline of other new ingredients and products, which it plans to launch in the coming years. In order to support its growth plan, Algatechnologies plans to invest over $20 million in expanding the company's production capabilities and speeding up R&D operations and development of new products.
Algatechnologies CEO Hagai Stadler said, "The deal represents a significant milestone for us and will enable Algatechnologies to realize its vision of making unique varieties of microalgae available to the world as an innovative source of the ingredients required by the food and healthcare markets. Algatechnologies amazing team is writing new pages every day in the microalgae book and is expanding the limits of the creative and innovative capabilities in the field, which is still in its infancy. Microalgae will capture a central role in various industries in the 21st century and Algatechnologies from Israel's Arava will be a main part of it."
Solabia Group CEO Gerard Josset said, "The pioneering R&D capabilities of Algatechnologies, the impressive production facilities, the broad range of products and its well established customer base give Solabia an opportunity to strengthen its status in the microalgae industry, and especially in the nutritional and food additives market. Following the acquisition that we made in 2016 of Algues & Mer, the capabilities of Algatechnologies will enable us to strengthen and deepen our positioning in the foods and food additives market. We look forward to working with Algatechnologies team, which is rich in achievements and we are certain that it will help speed up growth of our existing products portfolio and in the development of new algae based products for the cosmetics and pharmaceuticals industries."
Grovepoint Founding Partner Bradley Fried added, "When we invested in Algatechnologies six years ago, we identified a growth opportunity in the microalgae market and we saw a company with great potential to lead the sector. Algatechnologies team has succeeded in realizing the capabilities of microalgae and making the company's products available to the company's large customer base around the world. We are proud of our investment in Algatechnologies and wish Solabia and the company success in future development stages."
In Israel Adv. Peter Sugarman from Yigal Arnon & Co. represented Algatechnologies, Adv. Asaf Nahum from Herzog Fox & Neeman served as legal advisor to Solabia. In the UK, Mishcon de Reya represented Algatechnologies and Latham & Watkins represented Solabia.
Published by Globes, Israel business news - en.globes.co.il - on May 22, 2019
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