Nestle is buying Canadian vitamin maker Atrium Innovations for $2.3 billion, expanding its presence in consumer healthcare as it seeks to offset weakness in packaged foods.
The world’s largest packaged food company said on Tuesday it will buy the maker of vitamins, probiotics and meal replacements from a group of investors led by Permira Funds.
About 80 percent of Atrium’s sales come from the United States, meaning there is still room to buy businesses elsewhere, such as the vitamins unit being sold by Germany’s Merck, which has a large presence in emerging markets and is also being looked at by Nestle.
“We continue to look for opportunities in things that make sense in very disciplined fashion,” said Greg Behar, head of Nestle Health Science, the division that will house Atrium Innovations.
Nestle Health Science already sells nutritional products for people with specific medical conditions and has been at the forefront of Nestle’s ambition to become a “nutrition, health and wellness” company as packaged food sales slow, amid changing tastes.
Nestle, the maker of Gerber baby food, Purina pet food and Nescafe coffee came under pressure this year to improve returns from activist shareholder Third Point. It has since announced a share buyback, a margin target and three other small acquisitions.
The purchase of Atrium, which will have $700 million in sales this year, will add to earnings immediately, Behar said. The deal reflects comments made earlier this year by Nestle’s new chief executive, Mark Schneider, who identified consumer health as a strategic priority.
“They’ve been trying to articulate a message around Nestle Health Science and health and wellness for some time,” Liberum analyst Robert Waldschmidt said. “In terms of nutrition, this makes sense.”
Atrium has seven factories in the United States, Canada, Europe and Argentina. Its biggest brand is Garden of Life supplements.
This is Nestle’s fourth purchase in recent months. It announced deals for Sweet Earth vegetarian foods and Blue Bottle coffee in September and Chameleon Cold-Brew coffee in November.
The purchase of Atrium is expected to close in the first quarter of 2018.
Atrium was advised by Morgan Stanley, RBC Capital Markets and William Hood & Co, a division of AXIA Capital Markets.
By Martinne Geller
International Flavors & Fragrances (IFF) has announced the appointment of Frank Clyburn as CEO and member of the board of directors, effective 14 February 2022. Clyburn, who will step down from his position as executive VP and president of human health at Merck & Co, succeeds current IFF CEO Andreas Fibig
Jack Link’s-owned meat snacking brand Peperami has launched new chorizo five-packs to add to its extensive snack portfolio. The new chorizo sticks are made with 100% pork, packed with protein, contain 99 calories and are unpasteurised to maintain a fuller flavour — providing a shelf life of over six months.
While foam is certainly desirable in the bathtub or on beer, preventing foam – for example in industrial processes – is a much-discussed topic. A team of researchers at the Max Planck Institute for Polymer Research has now shown that so-called “superamphiphobic surfaces” can be used to prevent foaming.