Swedish probiotic company Probi has signed an agreement to acquire the operations of US probiotic company TNTGamble – known as Nutraceutix – for a preliminary purchase price of $105 million.
The acquisition will increase Probi’s market share in North America three-fold; add important new technologies, manufacturing capabilities and customers; and create a strong platform for further acquisitions, the company said. North America is the world’s largest and fastest-growing probiotic dietary supplements market, and Probi’s move for Nutraceutix will make it a “top-tier integrated probiotics player” with significantly enhanced scale, geographic footprint, value chain presence and capability.
One of the US’ largest probiotics manufacturers, Nutraceutix generated net sales in 2015 of more than $60 million – double Probi’s current size – and will more than treble its net sales in the North American marketplace.
The transaction combines proven, proprietary and patented delivery technology from Nutraceutix with Probi’s well-documented strain portfolio, enabling novel and differentiated probiotic products, the Lund-based company added.
Probi CEO Peter Nählstedt said: ”I am very excited about this transforming acquisition. Nutraceutix is an excellent match for us. Probi and Nutraceutix have complementary business models, limited customer overlap and share strong entrepreneurial values. The acquision creates a strong platform to continue the growth story in the US and in the global market.”
Nutraceutix CEO Tim Gamble added: “I cannot imagine a better combination of two well-respected organisations. With highly complementary expertise, assets, product offerings, and a shared strategic focus on quality-conscious growth, I envision an outstanding future for the new entity. The transaction will result in the creation of a global leader in the probiotics and probiotic dietary supplement space, and will open up a wealth of new opportunities for the company, its employees and its customers.”
The acquisition will be financed through a combination of cash, credit and a bridge facility, repaid from the proceeds of a share issue amounting to SEK 600 million ($73.9 million).
Symrise and Fjärde, which control around 51.4% and 5.9% of Probi respectively – as well as Swedbank Robur Fonder and Handelsbanken Fonder, which together control approximately 11.8% of the outstanding share capital and votes – have indicated their intention to vote in favour of the rights issue.
The deal is expected to be completed within four months.
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