Numico completes exit from supplements
dealings in nutritional supplements, as it completed the sale of
its US business GNC to investor group Apollo Management.
The transaction, worth $750 million in cash, came around at the same time as the company sold off the rest of its European supplement activities, such as Vitamex in Sweden, bought for €31 million by Wilhelm Sonesson.
Numico's new strategy focuses on the core businesses of baby food and clinical nutrition, slated to drive growth and produce higher margins. Numico is currently the leading infant nutrition maker in Europe, although sales from this unit (€1.06 billion) contributed less revenue than GNC in 2002.
But third quarter results at the baby and clinical units showed good growth - combined net sales were up 9.3 per cent while EBITA climbed 18.3 per cent - appearing to confirm the merits of the new strategy. A costcutting drive to streamline the European baby food business is set to generate savings from early next year.
Numico bought GNC in 1999 but the business, the world's largest manufacturer and marketer of supplements and vitamins, has been a major factor in the group's heavy losses over recent years. It did however show a 7.7 per cent sales increase during the third quarter of this year, the first positive growth since the fourth quarter of 2001.
The sale will help ease the burden of debt for the group. The proceeds of the transaction were received on Friday and will be used to pay down the dollar-denominated part of the existing senior bank loan facility. It also reduces earnings volatility and retail exposure and significantly diminishes Numico's exposure to the US dollar.