Nestlé will acquire four core brands of the supplements and nutrition company, including Nature’s Bounty
Nestlé said it has agreed to pay $5.75 billion to investment firm giant KKR for core brands of The Bountiful Company, a pure-play manufacturer of vitamins, minerals and supplements. Rumour had it the sale was imminent.
The transaction includes the brands Nature’s Bounty, Solgar, Osteo Bi-Flex and Puritan’s Pride as well as the company’s US private label business.
Nestlé will be integrated into its Health Science business unit, creating a global player in vitamins, minerals and nutritional supplements.
“Vitamins and supplements are a key part of our business and have contributed to strong growth acceleration,” said Nestlé Health Science chief executive Greg Behar. “This acquisition complements our existing health and nutrition portfolio in terms of brands and channels. It will establish Nestlé Health Science as the industry leader in mass retail, specialty retail, e-commerce and direct-to-consumer in the US, while offering significant opportunities for geographic growth.”
The Bountiful Company’s sports and active nutrition brands Pure Protein, Body Fortress and MET-Rx, as well as Dr. Organic and the Canadian over-the-counter (OTC) business, which do not complement the Nestlé Health Science portfolio, are not included in the deal.
Paul Sturman, president and chief executive of The Bountiful Company, said: “Today’s announcement from Nestlé Health Science recognises the transformation of The Bountiful Company over the past 3-plus years, as well as the collective value and capability of the organisation. I am incredibly grateful to the more than 4,500 colleagues around the globe who have worked tirelessly to get us to this point.”
The transaction is expected to close in the second half of this year, following the completion of customary closing conditions, including regulatory clearance.
Private equity investors
KKR, primarily through its Americas XII Fund, acquired a majority interest in The Bountiful Company from The Carlyle Group in 2017. Carlyle Partners V and Carlyle Europe Partners III funds retained a minority stake in the company and the firm is participating in the sale alongside KKR.
Felix Gernburd, managing director at KKR, said: “Since KKR’s investment, The Bountiful Company has transformed into a leading, fast growth, pure-play nutrition platform through significant investments in talent, brand building, R&D, e-commerce, and manufacturing capabilities. We’re immensely appreciative of everything Paul Sturman and the management team have done to build a unique company that is dedicated to bringing wellness to its communities and creating value for all of its stakeholders.”
The transaction is valued at $5.75 billion on a cash free, debt free basis, representing a multiple of 3.1x net sales and 16.8x EBITDA as of 31 March 2021.
Nestlé said the acquired brands recorded net sales of $1.87 billion in the last twelve months ending 31 March, with an EBITDA of 18.3%. The company argued this EBITDA will be negatively affected by one-off integration costs, which will be slightly dilutive to Nestlé’s underlying trading operating profit margin in 2021. The margin is expected to increase above the Nestlé Group average once synergies are fully implemented by 2024.
Nestlé Heath Science’s current vitamins, minerals and supplements brands include Garden of Life, Vital Proteins, Pure Encapsulations, Wobenzym, Douglas Laboratories, Persona Nutrition, Genestra, Orthica, Minami, AOV and Klean Athlete.
Date published: 30 April 2021