News | August 3, 2000

DSM Acquires Catalytica Pharmaceuticals

DSM Acquires Catalytica Pharmaceuticals
Strengthening its position in fine chemicals for life sciences

On August 3, DSM (Heerlen, The Netherlands) and Catalytica, inc. (Mountain View, CA) announced that DSM would acquire Catalytica's pharmaceutical outsourcing subsidiary for $800 million. By purchasing Catalytica Pharmaceuticals, DSM strengthens is position as a leader in fine chemicals for life sciences and pharmaceuticals.

As a result of this acquisition, DSM's sales in life science products will increase by EUR 450 million to EUR 2.2 billion and will represent 31% of DSM's overall sales (all figures based on 1999). The share of the pharmaceutical sector in DSM's sales will increase from 15% to 20%, making this sector DSM's biggest end-use market by far.

Catalytica Inc. will combine its Catalytica Combustion Systems and Catalytica Advanced Technologies businesses into a single entity and distribute resulting shares of the new company to Catalytica shareholders.


Catalytica's Greenville, NC plant, was its pharmaceutical business's crown jewel.

The transaction is subject to the approval of Catalytica's shareholders as well as clearance under U.S. antitrust law. The biggest shareholder and certain affiliates of the company together owning 32% of the voting shares have pledged their full support for the transaction. It is expected that the transaction will be completed around the end of this year.

Peter Elverding, chairman of the DSM Managing Board, stated that his firm wished to realize accelerated growth in life science products, especially in the important pharmaceutical market, and at the same time increase our presence in the USA.

"We are achieving both these goals by acquiring Catalytica Pharmaceuticals," Elverding said. "I can't think of any better partner for DSM. In terms of technology, geographic markets as well as customer base, Catalytica Pharmaceuticals' activities complement ours perfectly. This acquisition will enable DSM to upgrade and expand its services for the pharmaceutical industry."


Catalytica will focus on commercializing its Xonon combustion technology. Xonon combustion generates the same high temperature outlet gases which drive the turbine, while limiting NOx emissions to less than 2.5 parts per million.

Catalytica apparently decided to focus on its energy business, particularly its Xonon Cool Combustion technology, which the company claims results in near-zero polution. Said Ricardy Levy, Catalytica's President and CEO, "This transaction brings value to our stockholders and will also enable us to bring them a new and separate entity focused in the energy technology sector. With dynamic changes happening in the power generation market, we believe the Xonon Cool Combustion is well positioned to address the needs of this rapidly growing market."

Catalytica Pharmaceuticals, with its 1,600 employees, will operate under the name DSM Catalytica Pharmaceuticals and will form a business unit of the DSM Fine Chemicals business group.

For more information: Jackie Cossmon, VP of Investor Relations, Catalytica, Inc. Tel: 650-960-3000, ext. 6204.

Edited by Angelo DePalma