Natraceutical Group Purchases Laboratoires Forté Pharma

04/08/06 Natraceutical Group announced the signature of a binding agreement for the 100% acquisition of Laboratoires Forté Pharma, a French nutritional supplements company. The 82 million euros it will have to pay out on formalising the operation will give a new spurt to its growth, and, more importantly as far as the group is concerned, will allow it to reach the final consumer with their own products, thus extending their value added process.

The group plans to conclude the operation during the second half of this tax year. The purchase will be made free of liabilities and Natraceutical, which will pay in cash, intends to finance the operation with part of its own debt capacity and by means of an amplification of capital. This formula, already used in the previous acquisition of the group, will give it sufficient additional financial capacity to tackle its new projects of organic growth and maintain appropriate debt ratios.

Laboratoires Forté Pharma develops nutritional supplements, principally for the market segments of slimming, health and beauty. Over the last four years the company has multiplied its sales by five, it has become the leader of the segment for slimming supplements in France and has started distributing its products in other countries in Europe, like Belgium or Italy, in addition to Spain, where many of their products are already on the market.

The company basically has three ranges of products:

* The slimming segment includes a wide range of products which help towards slimming in all the phases of the process (from starting out to maintenance) presented in a range of different pharmaceutical forms.
* The health segment offers a range of supplements aimed to provide solutions to the symptoms of the menopause, pains in the joints, problems with vision or stress amongst others.
* The beauty range on the other hand consists mainly of anti-aging products.

For 2006, the European market for nutritional supplements is valued at 4,600 million euros, and, perhaps more significantly, shows a growth rate of 10% overall. It is important to emphasise that per capita consumption of nutritional supplements in Europe is only 17 euros compared with 65 euros per capita in the USA or 78 euros per capita in Japan.

Effects and synergies

The integration of Laboratoires Forté Pharma in Natraceutical Group will mean the definitive consolidation of the latter as a European company of reference in the field of functional nutrition and nutritional supplements, extending its value added process to the final consumer. Natraceutical Group specialises in the extraction, production and commercialisation of natural pectins, fruit and vegetable powders, natural colourings and ingredients, active ingredients and functional vegetable extracts, aimed mainly at customers of the food sector. The majority of these customers incorporate them in their products, thus converting them into functional foods, i.e. foods whose continued consumption brings about health benefits. For its part, Laboratoires Forté Pharma starts by acquiring active ingredients, with which it produces its nutritional supplements which it offers directly to the final customer. The objective of the final product is also to bring health benefits to consumers.

The acquisition of Laboratoires Forté Pharma allows Natraceutical Group:

* to penetrate a new sector of activity complementary to that of functional nutrition, and to gain direct access with its R+D to the final customer
* to increase its range of products by 32 new products
* to count on its own commercial network which regularly visits more than 6000 sales outlets in France and other European countries
* greater agility in launching new products
* to increase its R+D department and to launch developments via two channels simultaneously: nutritional supplements and foodstuffs

New figures

Natraceutical had a sales volume in 2005 of 53 million euros, an EBITDA of 5 million, a net profit of 3.8 million and has announced for 2006 a sales income of 100 million euros and an EBITDA OF 16 MILLION. After the signature of the planned operation, these figures will increase, according to the consolidated pro forma, up to 150 million euros in sales volume, 24 millions of EBITDA and 17 million in EBIT. The number of employees will reach 470 professionals.