Nestle acquires Atrium for US$2.3 billion, extends consumer healthcare portfolio

068a228c-f51a-4321-80fd-dd2932c4856earticleimage.jpg

06 Dec 2017 --- Nestle has agreed to acquire Canadian nutritional health products manufacturer Atrium Innovations from a group of investors led by Permira Funds for US$2.3 billion in cash. Nestle notes that the move for the company, whose 2017 sales are expected to reach almost US$700 million, supports Nestle’s pursuit of growth opportunities in consumer healthcare to complement the company's focus on its high-growth food and beverage categories.

The price of purchase is 3.3 times Atrium's 2017 sales. Compared with similar deals, that is less than the 4.76 times that Reckitt Benckiser Group Plc. paid for Mead Johnson, but just above the 3 times that Danone SA paid for WhiteWave, according to Bloomberg data.

It may also be noteworthy that the vast majority of Atrium’s sales come from the US, meaning there is still room for Nestlé to buy businesses elsewhere, such as the vitamins unit being sold by Germany’s Merck, which has a large presence in emerging markets.

Pursuing growth opportunities
Nestlé Health Science already sells nutritional products for people with specific medical conditions and has been a leader when it comes to Nestlé’s ambition to become a “nutrition, health and wellness” company as sales of packaged foods have slowed.

The transaction for Atrium is expected to close in the first quarter of 2018 following the completion of customary approvals and closing conditions. Upon closing, Atrium, with its corporate offices in Quebec, Canada, will become part of Nestlé Health Science. Its existing management team will continue to manage the business, led by Peter Luther, Atrium Innovations President and Chief Executive Officer.

“We value Atrium’s history as a highly successful company and welcome its 1,400 employees to the Nestlé family,” says Greg Behar, Nestlé Health Science Chief Executive Officer. “Their brands are a natural complement to our Consumer Care portfolio, which offers nutritional solutions in the areas of Healthy Aging, Healthy Growing, Gut Health and Obesity Care. Atrium’s portfolio will extend our product range with value-added solutions such as probiotics, plant-based protein nutrition, meal replacements and an extensive multivitamin line, enabling consumers to address their health and wellness goals.”

“Atrium’s established brands are in attractive categories and have the potential for continued strong growth as part of Nestlé through category, channel and geographic expansion,” adds Behar. “It also represents additional offerings in the segment for non-GMO, organic and natural supplements, a fast-growing consumer trend, as well as a new sales channel.”

“Since Atrium was established in 1999, we have been dedicated to providing premium-quality, science-based, professionally recognized products to consumers and healthcare practitioners,” says Luther. “We are very pleased to be joining Nestlé Health Science as we share a common purpose of helping people lead healthier lives by providing good-for-you products made with the highest standards for quality and efficacy. Nestlé will provide Atrium with the resources to accelerate the growth of our brands and reach more people globally.”

Strategic move
The move comes shortly after Mark Schneider was appointed Chief Executive Officer of Nestlé, with some analysts indicating that he may be reshaping the traditional food group.

The Atrium purchase means that Nestlé now has access to supplements such as probiotics, meal replacements and plant-based proteins. It also has access to multivitamins, which are seeing an increase in demand as consumers seek to safeguard their health and reject mainstream brands.

The move seems to fit in with the strategic blueprint that Schneider set out at the end of September. At that time, he pledged to look for opportunities in consumer healthcare outside of the company's core areas of coffee, pet care, infant formula and bottled water.

Schneider’s reputation as an enthusiastic dealmaker has certainly been reinforced by several purchases in his first year in the job. As well as Atrium, he has moved for a smaller artisan coffee group and niche food businesses such as Sweet Earth.

Well-known brands
Atrium's largest brand, Garden of Life, is the No 1 brand in the natural supplement industry in the US, according to Nestlé. Garden of Life, headquartered in Palm Beach Gardens, Florida, manufactures certified organic, non-GMO supplements that are sold in more than 14,000 health food stores and online in the US, as well as select markets internationally.

The remainder of the Atrium portfolio includes strong specialty brands like Pure Encapsulations, Wobenzym, Douglas Laboratories, Genestra Brands, Orthica, AOV, Minami, Klean Athlete, Pharmax and Trophic.

Related Articles

Nutrition & Health News

Low-carb diet found to help battle fatty liver disease

20 Feb 2018 --- A carbohydrate-restricted diet can lead to “rapid and dramatic” reductions of liver fat and other cardiometabolic risk factors, along with marked decreases in the synthesis of hepatic fat, reveals a study published last week in Cell Metabolism. The study results could lead to improved treatments for non-alcoholic fatty liver disease (NAFLD). 

Nutrition & Health News

Saturated fat and sugar can cause depression and anxiety: study

14 Feb 2018 --- A diet rich in saturated fat, such as palm oil, and sugar not only leads to obesity, but it also creates inflammation in the nucleus accumbens, a part of the brain that controls mood and the feeling of reward. This inflammation can lead to depressive, anxious and compulsive behavior and disrupt metabolism, according to a study from the University of Montreal Hospital Research Centre (CRCHUM). The discovery illustrates the vicious circle experienced by people with obesity caused by a diet rich in sugar and saturated fat, with their diet leading to negative emotions, which can stimulate the quest for more comfort through food.

Nutrition & Health News

Clear definition and regulations needed to tap into nutraceuticals’ potential: review

13 Feb 2018 --- Nutraceuticals with health benefits substantiated by clinical data can be powerful tools to prevent and treat medical conditions, especially in individuals who may not yet be eligible for conventional pharmaceutical drugs. However, there is a clear need for clear regulations to ensure their safety. This is according to a review published in the British Journal of Clinical Pharmacology, which further proposes a clear definition for this type of product. 

Nutrition & Health News

Bridging the fiber gap: Tereos launches website on dietary fiber

13 Feb 2018 --- Consuming an adequate amount of fiber plays an important role in a wide range of health-related issues, by helping to reduce obesity, improve cholesterol and glycemic index levels and contribute to weight management. To educate consumers about dietary fibers, Tereos has launched a new website, which it says makes it easy to understand the company's Actilight fiber ingredient, its benefits and origin. 

Nutrition & Health News

Immunity boosters (Part 2): Not diplomatic about immunity – Innovation, new ingredients and R&D

12 Feb 2018 --- Immune health continues to drive trends in the nutrition industry. Today, in the second part of a special report, NutritionInsight continues its in-depth look at the latest ideas in the industry in the immune health space.

More Articles
URL : http://www.nutritioninsight.com:80/news/nestle-acquires-atrium-for-us23-billion-extends-consumer-healthcare-portfolio.html