Apr 30, 2021 - Economy

Nestlé to buy The Bountiful Co. in $5.75 billion deal

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Photo: Stefan Wermuth/Bloomberg via Getty Images

Nestlé (Swiss: NESN) agreed to buy The Bountiful Co., a Ronkonkoma, N.Y.-based maker of nutritional supplements, for $5.75 billion from KKR and minority owner The Carlyle Group.

Why it matters: Supplements haven't been talked about much as a pandemic play, but Nestlé Health Science CEO Greg Behar says that 91% of vitamin-takers have increased consumption over the past year, in an effort to boost their immune systems. And Behar should know, given that he previously shelled out $2.3 billion for Atrium Innovations.

  • Included brands are Nature's Bounty and Puritan's Pride, Solgar and Osteo Bi-Flex. Not included are Bountiful's sports and active nutrition products, including Pure Protein and MET-Rx, plus Dr Organic and its Canadian OTC business. Expect KKR and Carlyle to seek a buyer for the remaining assets.

Background: Carlyle took Bountiful private in 2010 in a $3 billion deal, before selling a majority stake to KKR in 2017. Bountiful had filed for an IPO earlier this month.

The bottom line: "Nestle's $5.75 billion acquisition, at a price of 3.1x sales and 16.8x EBITDA, fits its specialist nutrition and wellness focus and adds another lever to growth once integrated into the business. The deal increases Nestle's net debt-to-EBITDA ratio to about 2x from 1.7x, so it won’t affect its ability to either acquire further assets, or buy back shares." — Duncan Fox, Bloomberg Intelligence

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