Chr Hansen to sell coatings and excipients division
excipients business in order to focus on core activities in
cultures, enzymes, natural colours and flavours.
The move is no great surprise since the Danish company announced last year that it does not regard the unit as a core business area. It subsequently conducted an evaluation of the business, which included a business improvement plan to improve profitability. The sale process is said to be in its "early stages", with no value or potential buyer identified yet. But the company said: "There have been good signs of interest for the business unit, and Chr Hansen anticipates a closing sale before the end of the year." Coatings and excipients are described as "non-active" ingredients used mainly by the pharmaceutical and related industries (such as dietary supplements) for tablet manufacturing. The company's activities in this area are targeted mainly at the US market, and it has a production facility in Stoughton, Wisconsin, which will be included in the sale. From its analysis, Chr Hansen concluded that a buyer "would have the best opportunities to capitalise on both technical capabilities as well as the know-how of the approximately 20 people in the current Chr Hansen business unit". Chr Hansen has been majority owned by private equity firm PAI Partners since June 2005. Since it is no longer listed on the Copenhagen Stock Exchange, financial information relating to the recent performance of the coatings and excipients business unit was not available. Across the group as a whole, revenue for the year 2005/6 increased by 8 per cent over the previous year to DKK 3,767m (€505.8), while organic growth amounted to 6 per cent. Operating profit (EBITDA) increased by 25 per cent to DKK 624m (€83.8m). Excluding extraordinary restructuring costs EBITDA amounted to DKK 767m (€103.0m).