Nestlé to acquire Permira backed Atrium for US $2.3B

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By Ted Liu

Nestlé SA has agreed to acquire Atrium Innovations from a group of investors including a company backed by the Permira Funds, Fonds de solidarité FTQ and Caisse de dépôt et placement du Québec, for US $2.3 billion in cash.

The transaction is expected to close in the first quarter of 2018 following the completion of customary approvals and closing conditions.

Upon closing, Atrium, with its corporate offices in Quebec, will become part of Nestlé Health Science. Its existing management team will continue to manage the business, led by Peter Luther, Atrium Innovations President and Chief Executive Officer.

In February 2014, Acquistion Glacier II Inc., a company 75% owned by Permira and 12.5% owned each by Fonds de solidarité FTQ and Caisse de dépôt et placement du Québec, closed privatization of Atrium for CDN $1.1 billion.

Atrium is a world-wide leader in nutritional supplements and one of the fastest growing companies in the industry globally. Its brands and business model are complementary with Nestlé’s science-based nutritional solutions for consumers, patients, doctors, nurses and other partners in healthcare.

Atrium has over 1,400 employees and operates seven manufacturing facilities, all of which comply with Current Good Manufacturing Practices. The family of Atrium Innovations brands includes Garden of Life®, Pure Encapsulations®, Wobenzym®, Douglas Laboratories®, Genestra Brands™, Orthica®, AOV®, Minami® Klean Athlete®, Pharmax and Trophic™. Atrium also distributes UNDA® and Wild Rose® brands.

Atrium’s 2017 sales are expected to reach almost US $700 million.

“We are very pleased to be joining Nestlé Health Science as we share a common purpose of helping people lead healthier lives by providing good-for-you products that are made with the highest standards for quality and efficacy,” said Peter Luther, President and CEO of Atrium. “Nestlé will provide Atrium with the resources to continue the strong growth of our brands and reach more people globally.”

Luther continued, “This exciting next chapter for Atrium would not have been possible without our successful partnership with the Permira Funds. Their support, unique expertise and deep relationships around the world have helped us become one of the fastest growing companies in our space by focusing on the strength of our trusted brands, bringing our products to more customers in more markets, investing in operational excellence and building a first-rate organization and team. We are proud of our accomplishments and look forward to continued growth as part of Nestlé Health Science.”

John Coyle, Partner at Permira, said, “We are tremendously proud to have helped Atrium expand its leadership position and become one of the fastest growing companies in the global vitamins and supplements industry, driven by the popularity of market leading brands Garden of Life and Pure Encapsulations. The successful partnership with Atrium underscores our ability to combine our strong consumer brands and healthcare expertise and draw on our international network to back ambitious consumer healthcare businesses to expand globally while creating attractive returns for the Permira Funds’ investors. The growing interest in healthy living and wellness is one of our key investment themes across both our consumer and healthcare sectors and we will continue to look for opportunities to partner with innovative businesses. We are confident that with the backing of its new strategic owner Nestlé, a company with a 100-year history operating in Canada and over 1,000 employees in Québec, Atrium will continue its track record of success and commitment to Canada.”

Morgan Stanley & Co. LLC, RBC Capital Markets, LLC and William Hood & Company, a division of AXIA Capital Markets, acted as financial advisers and Skadden, Arps, Slate, Meagher & Flom LLP and Stikeman Elliott LLP acted as legal advisers to Atrium.

photo credit: Atrium Innovations