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LONDON (Alliance News) - Irish food and nutrition firm Glanbia PLC said Thursday it has agreed to buy iconic weight loss and nutritional products pioneer SlimFast from private equity firms Kainos Capital LLC and Harris Williams LLC for USD350 million.
"I am pleased to announce that we have agreed to acquire SlimFast, a leading consumer brand in the USD8 billion weight management nutrition market, an adjacency to the Glanbia Performance Nutrition brand portfolio," Glanbia Managing Director Siobhan Talbot said.
In 2017, SlimFast - famous for its meal replacement shakes - generated adjusted earnings before interest, taxes, depreciation and amortisation of USD24 million on USD212 million in net sales. Including non-recurring supply chain transition costs, the firm generated a pretax loss of USD12 million.
In 2017, Glanbia itself generated EUR259.9 million in pretax profit on revenue of EUR2.39 billion. Adjusted Ebitda stood at EUR283.2 million.
Glanbia emphasised the 40-year-old SlimFast brand was "a well-established and growing brand" with "high levels" of brand awareness in its largest US market.
"SlimFast is an established and enduring brand and, along with nutritional supplements brands 'Healthy Delights' and 'Nu-Therapy', complements our existing portfolio targeting lifestyle consumers. It plays to global consumer trends focused on convenient formats and snacking. The transaction is in line with our strategic ambition to extend the reach of our Glanbia Performance Nutrition portfolio to related consumer needs."
Healthy Delights sells confectionery nutritional chews and Nu-Therapy markets natural extract supplements. Along with SlimFast, these brands will join Glanbia's existing Performance Nutrition brands. These include sports nutrition brands such as Optimum Nutrition, BSN and Nutramino, good-for-you snacks maker thinkThin and organic food brand Grass Advantage.
In 2017, the Performance Nutrition unit generated EUR1.12 billion, 47% of Glanbia's total revenue. In early August, Glanbia reported interim volume growth at the unit was 5.4% with reported revenue down 4.4% but up 4.9% in constant currency.
Glanbia expects the deal to close before the end of 2018, subject to regulatory approval. The firm will fund the deal through its existing banking facilities, and it expects the deal to be earnings per share enhancing from financial 2019 onwards.
In March, Kainos and Harris were understood to be looking to dispose of the SlimFast brand with financial news agency Bloomberg reporting - citing sources close to matter - a price of around USD400 million was being envisaged.
In 2014, Kainos and Harris acquired SlimFast and the smaller brands from FTSE 100 consumer goods giant Unilever PLC for an undisclosed sum. Unilever had paid USD2.3 billion - or more than six-and-a-half-times more - for the brands in 2000 before taking a number of large write-downs on them following sales slumps.
The final consideration paid by Glanbia to the Kainos and Harris subsidiaries which own the brands - KSF Holdings LLP and HNS Intermediate Corp - will be dependent on the value of working capital at completion. There is no deferred consideration.
Shares in Glanbia were 1.1% higher at EUR14.38 on Thursday.