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Martek Acquires FermPro Assets; Human Consumption Of DHA, EPA Authorized

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By: Sean Moloughney

Editor, Nutraceuticals World

Martek Biosciences Corporation, Columbia, MD, has signed a definitive agreement to acquire certain assets and assume certain liabilities of FermPro Manufacturing, Kingstree, SC. FermPro provides contract fermentation services, which generate revenues of approximately $20 million annually. The company has an experienced workforce of over 100 personnel on a site of over 500 acres with extensive fermentation, recovery, laboratory and warehousing capabilities; FermPro has produced docosahexaenoic acid (DHA) for Martek for the last year. After the asset acquisition is complete, Martek will operate the former FermPro facility as Martek-Kingstree. Martek-Kingstree will gradually replace the plant’s contract fermentation production with production of DHA and arachidonic acid (ARA). The purchase price of the assets being acquired includes a payment of approximately $10 million, comprised of $5 million in cash and 124,788 shares of Martek’s common stock, which represents a discount of approximately 10% to the current market price. A $10 million secured note will also be assumed as part of the transaction. FermPro president and CEO, Barney Easterling, will become a Martek vice president.

In other news, the Commission of the European Communities has authorized the use of Martek’s DHA oil for human consumption. The Commission de­clared that Martek’s DHA may be marketed in the European Community as a novel food ingredient.

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