There’s a sea change in the fish oil and krill markets. Norwegian krill supplier Aker BioMarine took two more steps in dominating the supply market with a financing deal that helped it acquire top-shelf fish-oil firm EPAX. New York private equity firm Lindsay Goldberg purchased 50 percent of the shares in Aker in a $45 million deal announced today. Lindsay Goldberg is said to have $10 billion of equity capital under management and a long-term investment horizon of up to 20 years.
The joint venture, for now to be called NewCo (and not Trygg Pharma as had been reported elsewhere), purchased Norwegian fish-oil supplier EPAX for $91 million, which also serves to wipe out EPAX’s outstanding debt of $51 million. EPAX, which was a wholly owned subsidiary of Austevoll Seafood and also based in Norway, specializes in high concentrates of EPA and DHA in ratios that address different specific health conditions. EPAX is also known as a vertically integrated fish-oil supplier, which adds value as far as quality and traceability goes. Aker is also vertically integrated, being the only krill supplier with its own fleet of ships.
“We certainly would like to be competitive,” said Egel Bodd, chairman of the board at Trygg Pharma, part of the Aker/Lindsay Goldman joint venture.
File that under: Understatement.
Aker, whose branded krill ingredient is called Superba, previously nabbed the leading krill supplement business in Schiff’s CPG supplement product called MegaRed. That had previously been the business of krill pioneer Neptune Technologies & Bioressources, whose branded ingredient NKO has been the only krill ingredient subject to human clinical trials.
More krill, better krill?
To that end, it is to be hoped that the Aker juggernaut invests appropriately in krill clinical research. That’s because while the krill market is growing briskly – Whole Foods Market’s decision to pull krill supplements from its shelves over sustainability concerns notwithstanding – it’s still been led by the blackboard science of its molecular makeup, of phospholipids plus DHA and EPA, more than clinical validation.
Neptune is to be applauded for its early investment in krill science, publishing three studies in 2007 and 2008 demonstrating krill’s efficacy against PMS and dysmenorrheal, in being superior compared to fish oils against blood-lipid parameters, and against arthritis inflammation and pain. But where Neptune excelled in research it faltered on the business end.
Aker, for its part on the business end, last month announced its first-ever quarterly profit, a mere $162,000, but a far cry from a first-quarter 2010 loss of $1.8 million. Aker also recently acquired leading industry movers-and-shakers Eric Anderson and Todd Norton. Anderson was brand manager for the MenaQ-7 vitamin K2 franchise at PL Thomas. Norton, now Aker’s VP of business development in North America, had leadership roles at AM Todd and Sabinsa.
The question is, is Aker eating the entire krill pie, or merely enlarging it? “I feel they’ve enlarged the pie,” said Mickey Schuett, director of sales at krill competitor Azantis, based in Colorado. “They’re making more awareness with krill, and we’re happy with that.”
Azantis has a relationship with Israeli lipids developer Enzymotec and will be rolling out omega-3 blends. Azantis is also partnering with Swiss company Ceutical to develop a water-soluble krill, which should have applications not only with beverages but also with other functional ingredients that have bioavailability issues, such as coQ10. “We’re really moving forward with a huge platform, we’ll have a lot more for people to choose from, especially on the krill side,” said Schuett. “Aker still has one product they’re marketing.”