Nestlé To Acquire Core Brands of The Bountiful Company

Nestlé and KKR have entered into a deal in which the former will be acquiring core brands of The Bountiful Company for US$5.75 billion. The Bountiful Company is the top pure-play leader in the highly alluring and growing global nutrition and supplement category.

The transaction encompasses the high-growth brands Nature’s Bounty, Solgar, Osteo Bi-Flex and Puritan’s Pride as well as the company’s US private label business. These brands will be merged into Nestlé Health Science, creating a global leader in vitamins, minerals and nutritional supplements. 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, have not been included in the agreement. The transaction is anticipated to get finished in the second half of 2021, after the completion of customary closing conditions, including regulatory clearance.

“Vitamins and supplements are a key part of our business and have contributed to strong growth acceleration,” stated Greg Behar, CEO of Nestlé Health Science. “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.”

“Today’s announcement from Nestlé Health Science recognizes the transformation of The Bountiful Company over the past 3+ 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,” Paul Sturman, president and CEO of The Bountiful Company informed. “As a leader in global nutrition, we take seriously our responsibility and role in consumers’ health and wellness. We’re incredibly proud of the trusted brands we’ve built and are confident that they will be strong assets for Nestlé.”

The transaction is worth around US$5.75 billion on a cash free, debt free basis, depicting a multiple of 3.1x net sales and 16.8x EBITDA as of 31st March, 2021. Net sales of the acquired brands were US$1.87 billion in the last one year ending 31st March, 2021, with an EBITDA of 18.3%. This EBITDA will be negatively impacted by one-off integration costs, which will be slightly dilutive to Nestlé’s underlying trading operating profit margin in 2021. The margin will hopefully increase above the Nestlé Group average once synergies are fully implemented by 2024.

By integrating The Bountiful Company’s core assets together with Nestlé’s leading science and innovation in health and nutrition, the latter is well placed to augment benefits in prevention and treatment solutions to consumers across the globe.

Nestlé Heath Science’s present vitamins, minerals and supplements brands include Douglas Laboratories, Garden of Life, Genestra, Pure Encapsulations, Vital Proteins, Wobenzym, Persona Nutrition, Orthica, Minami, AOV and Klean Athlete.