CVC Capital Partners Acquires DSM-Firmenich’s Animal Nutrition Business for €2.2 Billion

Deal Structure and Financial Terms

The transaction values the ANH division at a 7x EV/Adjusted EBITDA multiple based on normalized earnings.[1] CVC will pay €600 million in upfront cash consideration, with an additional €500 million in earnout payments contingent on performance milestones.[1] DSM-Firmenich will retain a 20% equity stake in both resulting entities and participate in the earnout structure, aligning incentives through the expected close at year-end 2026.[1][2]

DSM-Firmenich will receive approximately €1.2 billion in cash at closing, with the potential for an additional €500 million earnout.[2] The company expects to record a non-cash impairment charge of approximately €1.9 billion before taxes in 2025, with transaction and separation costs of €200 million anticipated in 2026.[2]

Business Separation and Operational Structure

The ANH business, which generated approximately €3.5 billion in annualized net sales in 2025, will be split into two standalone companies, both headquartered in Kaiseraugst, Switzerland.[1] The structure reflects a deliberate operational separation:

• Solutions Company: Encompasses Performance Solutions, Premix, and Precision Services divisions
• Essential Products Company: Houses Vitamins, Carotenoids, and Aroma Ingredients operations

This bifurcation enables CVC to pursue distinct value creation strategies tailored to each segment’s market dynamics and customer base within the broader animal nutrition and specialty ingredients sectors.

Strategic Rationale and Market Context

The divestment represents the culmination of DSM-Firmenich’s strategic repositioning toward consumer-facing nutrition, health, and beauty markets.[2] The company previously divested its feed enzymes business for €1.5 billion in 2025, signaling a deliberate exit from commodity-oriented animal health segments.[2] Following this transaction, DSM-Firmenich intends to launch a €500 million share buyback program in the first quarter of 2026, returning capital to shareholders as it narrows its portfolio focus.[2]

For CVC, the acquisition aligns with the firm’s established strategy in specialty chemicals and business services. The animal nutrition market benefits from secular tailwinds including global protein consumption growth, regulatory emphasis on feed efficiency, and consolidation dynamics that favor well-capitalized operators capable of managing complex supply chains and regulatory compliance across geographies.

Advisory and Professional Support

CVC assembled a comprehensive advisory team reflecting the transaction’s complexity. Financial advisors included Rabobank, Morgan Stanley, and Ernst & Young, while White & Case provided legal counsel.[1] Operational and commercial strategy support came from Kearney and McKinsey, with Latham & Watkins handling regulatory matters, ERM addressing environmental and health/safety considerations, and Montgomery IP managing intellectual property diligence.[1]

Closing Conditions and Timeline

The transaction remains subject to regulatory approvals and completion of employee consultation processes required under European labor law.[1] The separation of the Essential Products Company as a standalone entity must be finalized by DSM-Firmenich prior to closing, with completion expected by the end of 2026.[1] This extended timeline reflects the operational complexity of carving out a €3.5 billion revenue business while maintaining continuity in customer relationships and supply chain operations.

Implications for Private Equity in Specialty Chemicals

The transaction signals continued private equity appetite for mid-market specialty chemicals and animal health businesses, particularly where operational improvements and geographic expansion can drive returns. The 7x EBITDA entry valuation reflects disciplined pricing in a sector where consolidation and regulatory scrutiny have become defining features. CVC’s involvement underscores the asset class’s appeal to large-cap PE firms pursuing platform acquisitions with meaningful revenue bases and established market positions.