Innophos acquires NutraGenesis to boost its Food, Health and Nutrition portfolio
07 Nov 2017 --- Innophos Holdings has acquired NutraGenesis, a Vermont, US-based marketer of proprietary, branded and science-backed nutraceutical ingredients. This transaction builds on the momentum from its recent acquisition of Novel Ingredients and further advances Innophos’ Vision 2022 strategic priorities to grow its Food, Health and Nutrition portfolio, increase its presence in attractive nutrition end-markets and develop innovative solutions that better serve its customers.
Under the terms of the purchase agreement, Innophos has acquired all of the outstanding equity interests of NutraGenesis LLC, Icon Group LLC and Tradeworks Group, Inc., together referred to as NutraGenesis, for a total purchase price of US$28 million in cash.
Innophos has funded the acquisition with borrowings under its existing credit facility. The acquisition is expected to be accretive to Innophos’ earnings per share in the first year following the close of the transaction.
Aligned with mega-trends
“The addition of NutraGenesis' innovative, science-backed branded ingredients to our Food, Health and Nutrition portfolio more closely aligns Innophos with consumer mega-trends such as health and wellness, energized aging and clean labels,” says Kim Ann Mink, Ph.D., Chairman, President and Chief Executive Officer of Innophos Holdings, Inc.
“This transaction builds on the recent acquisition of Novel Ingredients and further strengthens our position as a leading specialty ingredient solutions provider to attractive end-markets,” Mink reports. “In addition, NutraGenesis’ asset-lite business model, complementary capabilities and established presence in high-growth nutraceutical markets make this a high-value addition for Innophos.”
Innophos gives the following reasons to establish why NutraGenesis is a science-based, proprietary, branded ingredients solutions provider:
- Strong and established portfolio of branded ingredients supplying leading US and international developers of branded nutritional ingredients.
- Highly complementary to recent Novel Ingredients acquisition and Innophos’ branded ingredients portfolio.
- Proven track record of partnering with clients to transform ingredients into marketable brands backed by scientific data that supports product efficacy and performance claims.
- Serving attractive high-growth end-markets – including stress reduction, weight management, joint health, brain health and metabolic wellness – that are driven by health and wellness consumer trends.
The following points are also given by Innophos to establish shareholder value:
- All-cash transaction consideration of US$28 million financed by existing credit facility.
- LTM sales of approximately US$12m, and accretive adjusted EBITDA margin of 22 percent.
- Strong double-digit historical growth trajectory and outlook.
- Asset-lite business model.
- Accretive to earnings per share within the first year of combined operations.
- Minimal impact on leverage.
- Continued strong cash conversion cycle supports current dividend and strategic growth ambition.
“Bringing NutraGenesis into our branded ingredients portfolio provides an immediate opportunity to combine their branding and marketing expertise with our sourcing, manufacturing and technology capabilities to offer more differentiated ingredients solutions to our customers,” Mink comments.
“We are confident that the acquisition of NutraGenesis will strengthen our growth profile and create sustainable value for our customers and shareholders,” Mink adds. “We remain focused on building out our Food, Health and Nutrition platform, driving sustainable growth and advancing toward our Vision 2022 goals.”
