NeutraHealth buys Brunel, consolidates industry presence

By Jess Hallliday

- Last updated on GMT

NeutraHealth has taken the next step in its bid to establish a
solid and unified presence in the nutraceuticals industry with the
acquisition of distributor Brunel Healthcare for £4m.

NeutraHealth started trading shares on AIM in early 2005 with the aim of acquiring growing companies in the fragmented nutraceutical sector. Its first two acquisitions - of Biocare and Nutrigold - have provided it with product to sell.

This latest step takes it into a different but synergistic sector of the marketplace, expanding its channels for delivering its branded products to multiple retailers.

"Further group synergies such as supply chain optimisation, the sharing of technical expertise and the combined promises to create a very solid platform for growth in 2007 and beyond,"​ it said.

Brunel, which had a turnover of 14m and EBITDA of 728,000 in 2006, distributes private label and branded vitamins, supplements and over-the-counter medicines to major retailers in the UK, including supermarkets Tesco and Waitrose, high street chemists Alliance Boots and Superdrug, and Holland & Barrett.

Amongst the products it represents are Sambucol Elderberry and Vertese gelatine-free supplements.

Chief executive Michael Toxvaerd called Brunel a "well-run"​ and "respected"​ company.

The £4m initial cash consideration for 100 per cent of Brunel's shares is being provided by a debt facility arranged with KBC Bank NV, consisting of a five-year term loan plus £3.5m revolver loan that replaces an existing facility.

The acquisition agreement also includes earn out considerations: for 2007 0.8m if 30 per cent PBIT growth is achieved on 2006 levels; and for 2008 1.1m if 70 percent growth is achieved on 2006 levels.

The earn-out may be extended to 2009 with a reduced consideration payable.

The Brunel deal is the second piece of good news from NeutraHealth this month. It has also announced a licensing agreement under which its products will be used by health practitioners operating in Champneys Spas across the UK, and Champneys-branded vitamins and supplements are expected to be made available through retail outlets later this year.

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