Croda International Plc ('Croda') announces that it has agreed to buy Solus Biotech ('Solus'), a global leader in premium, biotechnology-derived beauty actives, from Solus Advanced Materials for a total consideration of KRW350 billion (approximately £232 million) in cash and stock. The acquisition gives Solus access to its existing biotech-derived ceramide and phospholipid technologies, as well as its emerging natural retinol capabilities. Croda's Beauty Actives portfolio will be significantly strengthened as a result of this acquisition, as will its exposure to targeted prestige segments. Solus, based in South Korea, expands Croda's Asian manufacturing capabilities and establishes a new biotechnology R&D hub in the region.
Solus is a leading supplier of naturally derived powder ceramides, a fast-growing global market with additional potential in formulated ceramides. Over the last five years, the number of new personal care products containing ceramides has more than doubled, primarily for skin care but increasingly for hair care formulations. Access to Croda's formulation capabilities will accelerate the development of Solus' formulated ceramides, allowing us to provide even more value to our customers around the world while meeting exciting formulated ceramide demand.
Solus also brings a portfolio of phospholipids, spanning pharmaceutical applications and beauty care. These naturally derived phospholipids are produced at a GMP plant and can be used as delivery systems for pharmaceutical actives and cosmetics. This will strengthen our Pharma presence in Asia and enable collaborative R&D with Croda's Avanti business for the supply of lipid systems for drug delivery. In addition, Solus is developing biotech-derived retinol, which is an exciting, sustainable alternative to synthetically derived retinol.
Solus' growth will be accelerated by Croda's ownership through access to our technical and innovation capabilities, particularly in formulation, and by accessing our global selling network. The acquisition will give Croda greater ability to serve luxury beauty customers in Asia and globally, and the opportunity to accelerate delivery of Avanti's pharma product pipeline.
Commenting, Steve Foots, Chief Executive of Croda, said:
"This is a strategic bullseye for Croda, consolidating our position as a global leader in supplying sustainable, natural actives for personal care across three critical technology platforms of peptides, ceramides and retinol. It significantly enhances our sustainable biotechnology capabilities and adds a North Asia manufacturing and innovation facility, providing a springboard to premium markets in Asia and beyond. I am especially excited about their brilliant technology, with Solus bringing rich IP and proprietary know-how that we will be able to deliver to customers globally."
The acquisition is subject to regulatory approval.
Croda will report its financial results for 2022 on 28 February 2023.