Glanbia has agreed to buy diet brand SlimFast as part of a $350 million (€303 million) deal as it seeks to increase its exposure to lifestyle consumers.
The deal to buy the well-known brand from KSF Holdings and HNS Intermediate Corporation will also include nutritional supplement brands Healthy Delights and Nu-Therapy.
SlimFast, based in Palm Beach Gardens in Florida, is a leading brand in the $8 billion weight management nutrition market. In 2017, the company had net sales of $212 million and adjusted ebitda of $24 million. It reported a net loss of $12 million after non-recurring supply chain transition costs.
Consumer goods giant Unilever had acquired the business back in 2000 for $2.3 billion, before selling it on four years ago to KFS Holdings’ parent, US private equity firm Kainos Capital.
Glanbia’s managing director, Siobhan Talbot, said the deal complemented Glanbia’s existing portfolio.
“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,” she said.
‘Portfolio of products’
Jason Molins, an analyst with Goodbody Stockbrokers, said: “With a track record of over 40 years, SlimFast has built a portfolio of products across a range of categories including ready-to-drink and ready-to-mix, as well as nutritional supplement brands.”
Mr Molins welcomed comments from Glanbia executives on a conference call on Thursday that they were comfortable with how the group’s performance had been in the third quarter, ahead of a full trading update being issued in November.
The group currently expects its earnings per share to grow at between 5 and 8 per cent this year, excluding currency fluctuations.
The deal is expected to close before the end of 2018, subject to regulatory approval. Glanbia said that the transaction will be fully financed by its available banking facilities, and it is expected to add to net earnings from next year.
Davy analysts Cathal Kenny and Roland French said the deal was Glanbia’s most significant since its 2008 purchase of Optimum Nutrition, the world’s best-selling whey protein brand to gym-goers.
“It is the first time that Glanbia has acquired a storied brand with mass awareness,” the Davy analysts said, adding that they expect the Irish group to boost SlimFast with its own innovation and expertise, which should sustain “the continued rejuvenation of the brand”.