Irish nutrition group Glanbia (GLB.L) is to acquire SlimFast, a weight management brand, from Kainos Capital for $350m (€303m, £265m).
In a statement, the group said that it had signed an agreement with the owners of KSF Holdings, an affiliate of US private-equity fund Kainos Capital, and HNS Intermediate Corporation, which collectively own SlimFast and other brands.
SlimFast is a US company based in Florida, and markets weight-management shakes, bars, snacks, and packaged meals, among other products. It was acquired by Kainos Capital from consumer goods giant Unilever in 2014 for an undisclosed sum.
The $350m price tag, however, is just a small fraction of the $2.4bn (£1.8bn) Unilever paid Thompson Medical Company for the SlimFast brand in 2000. The giant struggled to make the investment pay off, and poor sales forced Unilever to significantly write down its investment in 2004.
Glanbia is headquartered in Co Kilkenny, Ireland, and is a world-leading sports nutrition, cheese, and dairy ingredients manufacturer.
In a statement, Glanbia group managing director Siobhán Talbot said that the deal was in line with its strategic ambition of extending the reach of its performance nutrition portfolio, and that SlimFast and the firm’s Healthy Delights and Nu-Therapy brands would help it target new lifestyle customers.
“It plays to global consumer trends focused on convenient formats and snacking,” she said. Glanbia said that, globally, the weight management nutrition market was worth $8bn.
In the first half of 2018, Glanbia saw its total group profits, after discontinued activities and exceptional items, fall to €98.2m ($113m), a €16.7m drop from the same period in 2017. Profits in 2017 jumped 55% on 2016 to €329.4m. Adjusted earnings per share for 2018 are expected to grow by 5-8%, according to guidance from the company.
While SlimFast generated net sales of $212m in 2017, non-recurring supply chain costs saw it post a net loss before tax of $12m.
Andrew Rosen, a managing partner of Kainos Capital, noted in a statement that the company had acquired SlimFast in 2014 “with no employees or systems.” In partnership with HNS, which is owned by current SlimFast CEO Chris Tisi, Kainos Capital built a 60-plus person team in the US and UK that “did a great job revitalising what was an orphan brand within a large multinational company,” Rosen said.
Glanbia said the transaction would be be fully financed by its available banking facilities, and that completion of the deal is expected before the end of 2018, subject to regulatory approval.