Nestle SA has confirmed it is in discussions to acquire vitamin maker Bountiful Co, potentially expanding in a segment the company entered under the five-year watch of Nestle chief executive officer Mark Schneider.
KKR & Co had been planning an initial public offering valuing Bountiful at more than US$6 billion, Bloomberg News reported in January.
An acquisition by Nestle could pre-empt the initial public offering, Bloomberg reported on Friday last week, citing a person familiar with the matter.
Photo: Reuters
Schneider dove into the field of vitamins and supplements in his first year as chief executive in 2017 with the US$2.3 billion acquisition of Atrium Innovations Inc. By doing so, he reversed course, as his predecessor, Paul Bulcke, who is now Nestle chairman, ruled out the segment, arguing it was too competitive a line of business.
Schneider has been buying larger brands of vitamins, trying to get pricing power and appeal to high-spending health-conscious consumers as Nestle simultaneously sheds other businesses such as US chocolate.
The strategy has delivered, with Nestle last week reporting sales growth at double the pace analysts predicted.
Supplements and minerals that boost the immune system are in high demand, and e-commerce has become an effective way to sell such products, the company said.
Nestle Health Science’s revenue rose almost 10 percent in the first quarter on an adjusted basis.
Nestle shares have gained more than 70 percent since Schneider became chief executive, and the company is worth more than US$300 billion.
Bountiful sells a wide range of vitamins that are available in retail chains such as Walmart Inc, CVS Health Corp and Rite Aid Corp. Supplements and vitamins are attractive targets during the COVID-19 pandemic, which has boosted demand for products that are advertised as helping consumers’ health and immune systems.
The company, which sells nutritional products under brands including Nature’s Bounty and Puritan’s Pride, filed registration documents for the listing earlier this month.
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