The €170m deal was due to complete – along with Ascendis’ purchase of pharmaceutical firm Remedica Holdings – on 1 August, but Wellner said a technical change by the Johannesburg Stock Exchange (JSE) has delayed the process by around two weeks.
“In South Africa, the JSE changed its reporting systems just now, so that threw us back around two weeks in the process – but this was a technical thing from the JSE. We want to finalise the two deals we’re working on – the pharma deal and the sports nutrition deal – by the end of August,” Wellner told us, adding everything including fund raising was on track.
With its purchase of Scitec International, which operates under the Scitec Nutrition name, Ascendis aims to expand its reach into Europe and the US, and also gain a hedge against its South African Rand business.
“Scitec is the number three sports nutrition brand in Europe, they’re growing nicely, they have a fantastic name in Europe and they’re active in the US as well. We have the feeling Scitec is a good brand, on to which we can also latch on our own brand and get more exposure for our current sports nutrition brands, and use the
internationalisation of Scitec,” said Wellner.
Scitec produces more than 280 sports nutrition products, including Protein Ice Cream, Protein Pancakes mix and Protein Pudding, nut butters, and its Hot Blood, Head Crusher and Vita Greens ranges.
“They have a good spread of exposure and a good range of products – their products are very good quality, and have excellent taste. In sports nutrition, it’s not only the quality that’s important, but excellent taste – without the taste, your products won’t do well.”
Wellner said he also expected to achieve manufacturing synergies and economies of scale following the acquisition, but said he could not comment on any specific details at this stage.
Growth in a saturated market
Regarding the industry’s future prospects, Wellner believes sports nutrition is well-placed.
“We still see nice growth worldwide in sports nutrition, and in some markets even double-digit rates. Even in Europe, where we have an inflationary situation of only 0-1% from a price point of view, we see unit growth still in the high single digits, or even double digits, depending on the market.
“Even a saturated market like Australia is still growing nicely. Australia has, I think, the highest per capita consumption of sports nutrition products in the world, and as an absolute market I think they’re number two or three in the world – and even a market like this still sees nice growth. So from that side, we’re quite confident about sports nutrition,” he added.
When asked about sports nutrition’s main challenges, Wellner said over-regulation was a problem in some markets.
“Of course we need consumer protection from a quality and regulatory point of view, but for example in South Africa, we’ve seen the medical control council tries to over-regulate all these nutritional, vitamin, supplement markets.
“As an industry we have to work to find a compromise with these regulators, so that’s a challenge these markets have – to find the right balance between consumer protection and freedom for business, and also the needs of the regulators,” added Wellner.