SWITZERLAND – World’s largest food company Nestlé has confirmed media reports that it is in talks to acquire The Bountiful Company, a New York based manufacturer of vitamins and supplements majority-owned by private-equity firm KKR.
Based in Long Island New York, Bountiful has been headed up by CEO Paul Sturman since 2017 and is a branded producer of vitamins and supplements under product lines such as Nature’s Bounty, Pure Protein and Puritan’s Pride.
Bountiful has manufacturing, packing, distribution, and warehouse facilities across the US and in Canada and the UK and is reported to have generated sales of more than US$2 billion in 2020.
The company was originally founded as Nature’s Bounty in 1971 before its was rebranded by KKR in partnership with CEO Sturman in 2017.
Apart from its own label brands, Bountiful also offers a private-label manufacturing services and “maintains offices overseas” in China, Spain, South Africa and New Zealand.
The business filed for an IPO on the New York Stock Exchange earlier this month, which could still go ahead, according to a report by The Wall Street Journal.
The publication said a deal with Nestlé could fetch a price in the region of ‘mid-single-digit billions ‘, presumably in dollars, and a transaction could materialise as soon as this week but with no guarantees.
Bloomberg in its analysis however says that a purchase of Bountiful by Nestlé may ‘pre-empt’ an IPO adding that New York Citybased KKR had been planning a share offering for Bountiful since at least January, valuing the business at US$6bn.
Vitamins Mineral Supplement (VMS) is an area that many big CPG companies have talked about with increasing interest and rightly so as the market was estimated to be worth between US$52 billion to US$56 billion in 2018, according to Market Watch
The health concerns that have risen during the covid pandemic are expected to spur growth of the market even further as consumers look to enhance their immune systems with healthier products.
As a result, Market Watch projects that the Vitamin and Mineral supplement market will grow at remarkable growth rate of 6.6% during the 2019-2025 forecast.
Bruno Monteyne, an analyst at AllianceBernstein, wrote in a research notes that Bountiful will indeed it build on Nestlé’s existing VMS profile after their acquisition of Atrium a couple of years ago.
Monteyne further noted that the intended purchase builds on Nestlé’s desire to push more into healthy/medical nutrition/self-care trends and “puts into action right away their intention to go into acquisition mode and acquire in this kind of price tag range.”
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