Acquisitions: 2006 round-up

By staff reporter

- Last updated on GMT

Related tags: Nutrition, Nestlé

The year 2006 has seen notable expansions in the nutraceutical
industry as companies made acquisitions based on their need for
increased geographic scope or manufacturing capacity.

Some companies expanded across the ocean, while others expanded domestically.

Making cross-continental acquisitions were Metagenics, Campina and Nutrition 21.

Metagenics, a Californian nutraceutical developer, firmed up its presence in Europe with the acquisition of Biodynamics, which helped it make its first inroads into the Benelux countries as a distributor to health care professionals.

Biodynamics, a Belgian company, sells several other brands for human and animal nutrition besides Metagenics', such as FuncioMed, StrotsTech, Extra-Nutri and AnimaMed.

The acquisition allowed Metagenics to expand beyond its main sales channel for nutraceuticals and medical foods, to health care professionals. In addition to this market, Biodynamics sells products through pharmacies, health foods stores and veterinarians.

Dutch-owned Campina bought dairy ingredient producer Inovatech Argentina. This signaled the company's desire to reach further into the global specialized ingredients market, with a particular emphasis on nutrition.

DMV International, a large supplier of ingredients used in functional foods and part of Campina, was in the process of adapting the Argentine dairy plant for value-added ingredient production.

Nutrition 21 became the latest nutraceutical company seeking to profit from the explosion of interest in omega-3, with the signing of an agreement to purchase consumer health product provider Icelandic Health that could also expand distribution of its chromium supplements.

Iceland Health, which reported sales in the region of $26m in the 12 months ended June 30 2006, has the exclusive US rights to a fish oil and omega-3 oils manufactured through a patented distillation process.

News of the deal signaled another new direction for Nutrition 21, which this year has made the transition from ingredients to finished products supplier but has until now occupied itself primarily with chromium picolinate.

Back in the United States, the sale of Zila's nutraceutical business to NBTY, including Ester-C, was completed. This marked the new owner's entry into ingredients and freeing up the old owner's attention for its core cancer detection interests.

The value of the transaction was reported at $37.5m, with a provision for up to $3m more to be paid through an earn-out formula, depending on future performance of the business.

When the acquisition was first announced, NBTY said it planned to take Ester-C to the next level through consumer advertising, with a major campaign due to get underway next year.

GTC Nutrition bought the majority of oat-derived ingredient manufacturer Nurture's assets as part of a deal that brought with it the promise of a larger distribution network for Nurture.

A business unit of corn refining company, Corn Products International, GTC Nutrition supplies and distributes ingredients throughout the Americas, Australia, and New Zealand. Nurture's flagship product, Oatvantage, boasts a high concentration of soluble oat fiber for lowering "bad" LDL cholesterol.

To date, Oatvantage is already used as a branded ingredient in products sold at retail in the US, but GTC's acquisition could open up further possibilities in dietary supplements and functional foods both at home and abroad.

In Europe, food giant Nestle confirmed its plan to purchase fellow Swiss company, Novartis Medical Nutrition, for US$2.5bn. This is a move that would propel Nestle from a minor player in healthcare nutrition to the world number two.

The Novartis unit makes nutritional supplements - both oral and tube delivery - for use in hospitals and nursing homes.

In addition to bolstering Nestle's health and nutrition division - a major area of focus and investment - the deal comes with 2000 employees, whose expertise will boost Nestle's R&D capability.

Related topics: Suppliers

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