InvestorQ : Can you tell me about the acquisition of Bountiful by Nestle?
Juvina Maggie made post

Can you tell me about the acquisition of Bountiful by Nestle?

Deepa Salunkhe answered.
1 year ago

Nestle of Switzerland agreed to buy Bountiful, a manufacturer of vitamins, for $5.75 billion. This will make Nestle the world leader in minerals and supplements as a new health-consciousness wave sweeps across the world post the pandemic. Nestle will be purchasing this stake from KKR and Carlyle. Nestle hopes that this acquisition will double its ecommerce earnings from supplements to about $1 billion annually.

Nestle had seen this health consciousness trend way back in 2017 when it had acquired Atrium Innovations for $2.3 billion. This is part of Nestle’s global strategy to expand into the lucrative field of specialized nutrition. It has been observed that over 90% of the people who took supplements, increased consumption during the pandemic to boost immunity. Nutrition saw a 10% growth in the last year.

Nestle expects the transaction to fully fructify in the second half of 2021. According to Bloomberg, the deal for Bountiful has happened at 3.1 times sales and 16.8 times EBITDA. The impact of this deal on debt will be minimal as the net debt/EBITDA ratio will marginally scale up from 1.7x to 2.0x. This valuation also syncs with what KKR was looking for in its proposed IPO at around $6 billion. Bountiful sells its vitamins through global retail chains.