A few weeks ago, Olmix Group announced the acquisition of Yes Sinergy, a Brazilian producer of natural feed additives made from sugar-cane yeasts, and organic chelated materials.
According to Olmix, the integration of Yes Sinergy will mark a “new milestone” in the development of its Animal Care Business unit and will accelerate Olmix’s development in Latin America. Meanwhile, the acquisition will boost Yes Sinergy’s presence in European and Asian markets.
Olmix said the combined group will generate revenues of more than €200 million, including nearly €150 million in animal nutrition, health and welfare. Founded in 2008, Yes Sinergy is headquartered in Campinas near Sao Paulo and operates two manufacturing plants in Bora and Lucelia, in the state of Sao Paulo. Olmix, meanwhile, operates seven industrial plants globally and a biorefinery specialised in algae processing. Olmix has a workforce of approximately 650 people and Yes Sinergy employs 300 staff.
According to Robert Clapham, Olmix Group CEO, the acquisition of Yes Sinergy is fully in line with Olmix’s Animal Care business unit’s growth plans of developing in Latin America. Moreover, the combined group now has a global presence spanning Europe, Asia, and Latin America, with the Animal Care business unit benefitting from having its revenues spread evenly across these three areas.
“Roughly 80% of our revenue is generated internationally. The markets we are in today are global markets, so it’s important we have that balance. We also need to accompany our larger clients who have operations all over the world. They want to have the same products anywhere they have factories. Our ambition is to be a truly global player within our markets. Yes Sinergy is giving Olmix the opportunity to do so,” Clapham told Feedinfo.
From the Yes Sinergy standpoint, the company was held by private equity fund Aqua Capital Investment since 2016. Aqua Capital Investment, whose focus is on the expansion of medium-sized companies within the agribusiness value chain in Brazil and South America, had helped Yes Sinergy achieve organic growth of 24% in net revenue and 25% in EBITDA since the 2016 acquisition. The private equity fund eventually put Yes Sinergy up for sale.
“That’s how we became aware of the opportunity, and it made sense for us to look into it,” Clapham commented.
Prior to that, Olmix has had teams in Latin America for roughly 10 years and already operates commercial subsidiaries in Brazil and Mexico. The Latin American market is big and for Olmix to be competitive, Clapham argued that a stronger footprint was needed. Olmix was looking to have a production site or a toll manufacturing partner within Brazil.
“To have production in different areas makes sense, also when it comes to the cost of transport and carbon footprint, etc. We were looking for production capacity and they [Yes Sinergy] had it,” Clapham said. The opportunity to acquire Yes Sinergy, for Clapham, “made a lot of sense” as it meets various objectives Olmix has for Latin America. “Yes Sinergy was also looking for production facilities outside of Brazil, and we have them,” he said.
“Olmix, prior to the acquisition, was very strong in Europe and Asia, not so much in Latin America. In terms of portfolio, we have a strong presence in premium products in the mycotoxin mitigation and gut health segments. Yes Sinergy has smaller activities for those ranges, but the company has a stronger presence than ours in other activities. So, there is no real overlap in terms of portfolio,” Olmix’s CEO added.
“The synergies we can build with the positioning between premium and medium range are interesting. We can bring our technical knowhow from the seaweed side of things towards their complementary portfolio. We both provide bio-sourced solutions. They use yeast extracts, and we use seaweed extracts. The R&D teams have the same type of mindset,” Clapham went on to say.
Clapham stressed that no job cuts are planned as a result of the integration.
“There is nobody left on the side of the road in this acquisition,” he commented. “Both companies, in making this step forward, change in dimension. It changes our position significantly in the market. We will be generating revenues of more than €100 million with just the feed additive side of our activities (more than €200 million globally as a group).”
Discussing the integration and Olmix’s strategic priorities in Brazil and the rest of Latin America for 2023 and 2024, Clapham pointed out that the immediate first step is the integration of the teams and cultures. The integration roadmap starts with commercial synergies, which are already being exploited since the announcement of the acquisition.
The second step is R&D. “To create R&D synergies is obviously a longer-term project but you need to start it quickly,” observed Clapham, adding that R&D teams in Brazil are coming over to France in September to spend time understanding algae at Olmix’s R&D centre in Roscoff, Brittany.
The third step will be the integration of the two product portfolios. “We want to make sure we have something that caters to the needs of the market on the different ranges that we have. Another step will be to investigate the pet food market further in collaboration with Yes Sinergy who have an opened door to this sector with their yeast products,” Clapham said.
“All this will take place over the course of the next six to nine months,” he added.
After these short-to-medium-term targets, Olmix will look into the toll manufacturing of its products in the Brazilian factories, while opportunities will be evaluated to manufacture Yes Sinergy products in Europe or Asia.
Asked whether new investments in Yes Sinergy's manufacturing can be expected, Clapham said the companies have the possibility to do so, but don’t currently need to expand manufacturing capacities in Brazil.
“Yes Sinergy has invested quite significantly in its two manufacturing plants in Bora and Lucelia over the last few years,” he said. “To produce our products on these production lines will require very small investments. It’s the same for their products if we are to manufacture them in Europe or Asia. We have the capacities and the tools to do it.”
For Clapham, the overall 2023-2024 integration roadmap is “ambitious but very feasible.”
