Orkla expands health care proposition with Healthspan acquisition

By Nicola Gordon-Seymour

- Last updated on GMT

©Healthspan
©Healthspan

Related tags: Orkla Health, healthspan, acquistions

Norwegian consumer goods brand, Orkla Health has established a presence in the UK health care market with the acquisition of Guernsey-based supplements supplier, Healthspan Group.

The acquisition involves Orkla Health purchasing 100% of the company’s shares for €78m (£65m) and includes an agreement to pay an additional £20m in two years, contingent on the company’s financial performance during that period.

Orkla is a heavyweight in Nordic branded goods with a turnover of around €5.05bn (£4.2bn). Main markets include retail, pharmacy and bakery with customers spanning Nordic countries, Baltic regions and selected markets in Central Europe and India.

Company President and CEO Jaan Ivar Semlitsch explains that Healthspan supports Orkla’s ambition to establish a stronger presence in the consumer health market and will underpin its position online.

“Healthspan has a broad portfolio of dietary supplements and has established a strong business model with direct sales to consumers in the British market. Both the health category and direct-to-consumer sales channel are growing,” ​he adds.

New market

Orkla supplies a range of dietary supplements, such as cod liver oil, vitamins, weight control and sports nutrition, under several brands, including Nutrilett, Maxim, Livol, Collett, and VitaePro, through four business units.

The largest business in the group is Orkla Foods that accounts for 39% of revenue, followed by Orkla Food Ingredients (23% of revenue), Orkla Care (20%), and Orkla Confectionery & Snacks (15%).

However, the purchase of Healthspan represents a new market for its Care division and is considered strategically important “along several dimensions​”. It constitutes Orkla’s first major investment in UK health care and aligns with group plans to grow the consumer health business by 50% over the next three years (to 2025).

Orkla Care EVP and CEO, Hege Holter Brekke said: “Through the acquisition of Healthspan, we are reinforcing our position in consumer health and establishing a new home market for Orkla Care.”

Business as usual

Healthspan will continue to operate as normal with the same management team and employee structure, including Martin Talbot as company chief executive officer (CEO) and Tim Coates as chief financial officer (CFO).

Talbot said: “We will continue to operate as a stand-alone business from Guernsey but with the opportunity to tap into Orkla’s expertise and strength to drive further growth and expansion. Healthspan will continue to operate the business with the same management team and employees in place following the acquisition.” 

Healthspan’s business plan forecasts growth in Europe, however under Orkla’s  ownership it is expected that operational synergies will help expansion in Europe and potentially Scandinavian countries and Baltic markets, he says.

“This is a great opportunity for both parties. For Healthspan it means we can tap in and utilise the breadth of expertise and scope and drive further growth. For Orkla our digital retail expertise, international and UK markets will support their growth.” 

Business scope

Healthspan was established in 1996 by Derek Coates and recorded a turnover of €60m (£50m) last year, with a pre-tax profit of €5.7m (£4.7m.) It employs 140 staff globally and around 500,000 customers, mainly in the UK.

The company offers a broad range of over 400 mainly branded health and dietary supplements (including CBD oil, vitamin D, omega-3, collagen, probiotics), and skin care products from three distribution centres in Great Britain, Ireland, and New Zealand.

The majority of products are sold direct-to-consumer (92%) through online channels, but the brand is currently establishing a presence on UK high streets in pharmacies.

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