Fattening up in weight management: Glanbia acquires SlimFast for US$350m


12 Oct 2018 --- Global nutrition group, Glanbia, is set to acquire SlimFast for US$350 million, from KSF Holdings LLP and HNS Intermediate Corporation who collectively own SlimFast and other brands. The company plans to operate SlimFast within its Performance Nutrition segment of the business which plays into global consumer trends focused on convenient formats and snacking, according to Glanbia. SlimFast is a well-established brand with high levels of awareness in the US, its largest market.

Headquartered in Palm Beach Gardens, Florida, SlimFast is a weight management and health and wellness brand family distributed primarily in the food, drug, mass and club (FDMC) channel in the US and UK. For more than 40 years, SlimFast has pioneered a range of products in this sector. SlimFast has a strong position in formats including ready to drink (RTD) and ready to mix (RTM) powder products as well as a new “Advanced Nutrition” range which includes high-protein, high-fiber, gluten-free meal replacement shakes and smoothies. Also included in the transaction are a number of nutritional supplement brands such as “Healthy Delights” and “Nu-Therapy.”

Click to Enlarge
SlimFast is a weight management and health and
wellness brand family distributed primarily in the food, drug,
mass and club (FDMC) channel in the US and UK.

Consumer goods giant Unilever had acquired the business back in 2000 for US$2.3 billion, before selling it in 2014 to KFS Holdings’ parent, US private equity firm Kainos Capital. At the time, Unilever said the sale was part of the company's ongoing effort to reshape its US portfolio and focus on its core higher-margin personal care business. According to Bloomberg, after being bought by Unilever, SlimFast sales suffered as dieters began worrying more about sugar and sought to restrict carbohydrates. In 2005, Unilever added a €200 million (US$245 million) writedown to an earlier €650 million charge after sales fell 20 percent the previous year.

In March this year, Bloomberg reported that SlimFast Foods Co.’s owner was considering a sale of the weight-loss business, almost four years after the private equity firm bought it from Unilever.

Dallas-based Kainos Capital was working with investment bank Harris Williams to run an auction process for SlimFast. Reflecting a decline in SlimFast’s popularity, that valuation would be only 17 percent of the US$2.4 billion that Unilever paid for SlimFast in 2000. Kainos agreed to buy a majority stake from the Anglo-Dutch conglomerate in 2014 for an undisclosed amount.

In 2017, SlimFast delivered US$212 million net sales, adjusted EBITDA (before non-recurring costs) of US$24 million and, after non-recurring supply chain transition costs, a net loss before tax of US$12 million. The gross assets of SlimFast at its 2017 financial year end were US$136 million. 

Speaking to FoodIngredientsFirst, a Glanbia spokesperson says: “Weight management is an attractive category as it is currently worth US$8 billion. Obesity levels are rising right around the world, so it’s a good time for us to target this.”

“SlimFast is a well-established and growing brand with high levels of brand awareness in the US, its largest market and also in the UK. Along with nutritional supplements brands ‘Healthy Delights’ and ‘Nu-Therapy,’ it complements Glanbia’s existing portfolio targeting lifestyle consumers. For some consumers, losing weight is a key goal – simply put this means consuming fewer calories than you expend. SlimFast helps people manage their weight by offering a range of nutritionally balanced and low-calorie products in a convenient format which helps them to control their calorie intake,” the spokesperson notes. 

The SlimFast brand contains a range of core products which are nutritionally balanced, dairy-based (skim milk) high in protein and fiber, low in sugar and fortified with vitamins and minerals. The product range includes ready to drink beverages, ready to mix powders, bars, snacks, gummies and supplements. 

Click to Enlarge
Siobhán Talbot, Group Managing Director of Glanbia says:
"The transaction is in line with our ambition to extend the reach
of our Glanbia Performance Nutrition portfolio to related consumer needs."

“SlimFast serves the needs of today’s busy consumer who wants to make good choices to maintain a healthy weight and who needs convenient food and snacking options to fit with their busy lifestyle. The SlimFast brand family plays to global consumer trends focused on high-protein, low sugar meal replacement and snack options as well as convenient formats and snacking.” 

The spokesperson also confirmed that this deal is the largest that Glanbia has done to date. 

Also commenting on the transaction, Siobhán Talbot, Group Managing Director of Glanbia (pictured), says the move: “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.”

The transaction is expected to close before the end of 2018 subject to the customary completion conditions, agreed closing accounts and regulatory approval. The final consideration will be dependent on the value of actual working capital at completion; there is no other deferred component to the proposal, according to Glanbia. 

Glanbia’s available banking facilities will finance the transaction and it is expected to be accretive to earnings per share from 2019 onwards, says the company. 

By Elizabeth Green

To contact our editorial team please email us at editorial@cnsmedia.com

Related Articles

Food Ingredients News

Whey and lactose analysis: Markets on growth track, protein trend remains key

02 Nov 2018 --- Whey and lactose ingredients will continue to outpace the general food and food ingredients market in terms of volume growth, and the whey and lactose industry will be able to keep up with the growing demand over the forecast period 2018-2022. This is according to Tage Affertsholt of Danish-based consultancy firm 3A Business Consulting. This assertion is supported by large investments in whey and lactose processing capacity and technology over the review period as well as increasing utilization rates of liquid whey as the raw material.

Food Ingredients News

Dairy expansion: Glanbia Nutritionals and partners invest US$470m in new Michigan facility

14 Aug 2018 --- Glanbia Nutritionals, Dairy Farmers of America and Select Milk Producers Inc. are set to build a new large-scale cheese and whey production facility in St. Johns, Michigan, US as part of a joint venture. The project is expected to be commissioned in the Q4 of 2020 and will cost approximately US$470 million.

Food Ingredients News

Weekly Digest: Mondelēz commits to sustainable wheat sourcing, Chr. Hansen and FMC extend natural crop protection collaboration

08 Jun 2018 --- This week in business, Mondelēz is expanding its Harmony program, the company’s sustainable wheat sourcing initiative, to cover 100 percent of its biscuit brands in the European Union by 2022 and Nestlé Waters certifying all of its sites to the Alliance for Water Stewardship (AWS) Standard by 2025. Chr. Hansen and FMC Corporation announced a five-year extension of their collaboration to develop and commercialize natural solutions for the agricultural industry and Nestlé was named most effective food marketer for the third year running based on the Effie Effectiveness Index 2018. A team of students from the University of Nottingham, UK won the gold prize at Ecotrophelia UK with their spicy BBQ flavored savory snack. Starbucks announced that its chairman Howard Schultz, is to step down later this month and Pavlos Photiades has been elected for the second term as The Brewers of Europe President.

Food Ingredients News

Glanbia adds quinoa and oat ingredients to beverage line

28 Mar 2018 --- Global nutrition group Glanbia Nutritionals has added oat and quinoa ingredients to its super-finely milled BevGrad line. The addition aims to keep pace with demand for products with whole grains, proteins and high fiber, for health-conscious consumers with busy lifestyles looking to pack in more nutrition

Business News

Glanbia revenues boosted by performance nutrition, Dairy Ireland sale

21 Feb 2018 --- Global nutrition group, Glanbia, has reported that its revenue from continuing operations rose by over 9 percent for the year for the financial year ended 30 December 2017. Revenues for the year rose to €2.387 billion (US$2.944bn) from €2.231 billion (US$2.751bn) in 2016, while the company also reported adjusted earnings per share growth of 10.2 percent to 87.11 cents. That was in line with guidance of 7-10 percent growth and marked Glanbia's eighth year of double-digit earnings growth.

More Articles