Oct 18 (Reuters) – Darling Ingredients Inc (DAR.N) said on Tuesday it would buy collagen products maker Gelnex for $1.2 billion in cash as the producer of ingredients for the bioenergy industry looks to boost production of collagen made from grass-fed cattle.
The market for collagen is expected to double in the next five years, Darling said in a statement, as the protein becomes a popular supplement and skin-care product ingredient, with claims to help smoothe wrinkles and benefit hair, nails, joints, bones and muscles.
Headquartered in Brazil with five facilities in South America and one in the United States, Gelnex has the capacity to produce 46,000 metric tons of collagen products annually, which it exports to more than 60 countries around the world.
Morgan Stanley & Co LLC acted as Darling’s exclusive financial adviser on the deal, which is expected to close in the first quarter of 2023. Banco Santander Brasil SA (SANB3.SA) advised Gelnex on the deal, according to one source with knowledge of the matter.
The negotiations began a year ago, added the source, who asked for anonymity to disclose private talks, and Gelnex received competing bids from strategic investors and private equity firms.
Reporting by Arunima Kumar in Bengaluru and Tatiana Bautzer in Sao Paulo
Editing by Anil D’Silva and Matthew Lewis
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