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    NESN   CH0038863350

NESTL╔ S.A.

(NESN)
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NestlÚ Expands in Vitamins With $5.75 Billion Nature's Bounty Deal

04/30/2021 | 04:38am EDT

By Nick Kostov

Nestlé SA has agreed to buy the main brands of vitamins maker Bountiful Co. for $5.75 billion, in the Swiss food giant's latest move to capitalize on growing demand for minerals and nutritional supplements.

The world's biggest packaged-food company said Friday the deal would add brands including Nature's Bounty, Solgar, Osteo Bi-Flex and Puritan's Pride to its offering. The Wall Street Journal reported last week that Nestlé was in talks to buy the company, which is majority-owned by private-equity firm KKR & Co.

In recent years, consumer-goods giants have scrambled to add health and wellness brands as shoppers spend more on self-care and products meant to stave off sickness or slow aging.

Nestlé Chief Executive Mark Schneider was plucked by the company in 2016 straight from the healthcare industry in part to accelerate that push. Last year Mr. Schneider said he wanted Nestlé to become "a health and nutrition powerhouse," in part through acquisitions.

Shortly after he took the reins in 2017, Nestlé acquired Canadian vitamin maker Atrium Innovations Inc. for $2.3 billion. More recently, the company bought Aimmune Therapeutics Inc., a biopharmaceutical business that has won approval for the first treatment for peanut allergies, in a deal worth $2.6 billion.

At the same time, Mr. Schneider has worked to diversify Nestlé away from slower-growing food and beverage products. In February, the company sold most of its North American bottled-water business for $4.3 billion, including brands like Poland Spring, Arrowhead and Pure Life.

Nestlé said Friday's deal for most of Bountiful, which was founded in 1971 and is based in Ronkonkoma, N.Y., would expand its nutrition presence in the U.S. and offer opportunities for growth elsewhere.

The brands Nestlé is buying generated sales of $1.87 billion in the year ended March 31.

The deal doesn't include Bountiful's sports and active nutrition brands like Pure Protein, Body Fortress and Dr. Organic, which Nestlé said didn't fit in its portfolio.

"Vitamins and supplements are a key part of our business and have contributed to strong growth acceleration," said Greg Behar, CEO of Nestlé's health science business.

Nestlé last week reported its best quarterly sales growth in almost a decade, with the performance partly driven by the company's Health Science unit, where organic sales rose almost 10%.

Nestlé said the growth was fueled by vitamins, minerals and supplements that support health and the immune system and that e-commerce sales in particular had grown strongly.

However, while nutrition products have become a greater area of focus under Mr. Schneider, Nestlé's health science business only accounted for about 4% of the company's overall first-quarter sales.

The market for vitamins and supplements products is also becoming more competitive as other big consumer-goods companies, including Procter & Gamble Co. and Reckitt Benckiser Group PLC, invest in the sector.

Earlier this week, Unilever PLC said it would buy food-supplement brand Onnit, which partners with athletes and medical professionals by incorporating their feedback on products that range from stress-relief supplements to oil that supports joint mobility.

Write to Nick Kostov at Nick.Kostov@wsj.com

(END) Dow Jones Newswires

04-30-21 0638ET

Stocks mentioned in the article
ChangeLast1st jan.
DJ INDUSTRIAL 0.04% 34479.6 Delayed Quote.12.61%
KKR & CO. INC. 0.86% 56.5 Delayed Quote.39.54%
LONDON BRENT OIL 0.33% 72.6 Delayed Quote.40.00%
NESTLÉ S.A. 0.07% 113.82 Delayed Quote.9.17%
RECKITT BENCKISER GROUP PLC -0.03% 6488 Delayed Quote.-0.83%
UNILEVER PLC -0.16% 4273.5 Delayed Quote.-2.70%
WTI 0.93% 70.787 Delayed Quote.45.60%
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Financials
Sales 2021 85 616 M 95 299 M 95 299 M
Net income 2021 11 993 M 13 349 M 13 349 M
Net Debt 2021 32 923 M 36 646 M 36 646 M
P/E ratio 2021 26,6x
Yield 2021 2,50%
Capitalization 321 B 357 B 357 B
EV / Sales 2021 4,13x
EV / Sales 2022 4,00x
Nbr of Employees 273 000
Free-Float 97,7%
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Mean consensus OUTPERFORM
Number of Analysts 28
Average target price 118,27 CHF
Last Close Price 113,82 CHF
Spread / Highest target 18,6%
Spread / Average Target 3,91%
Spread / Lowest Target -14,8%
EPS Revisions
Managers and Directors
NameTitle
Ulf Mark Schneider Chief Executive Officer & Director
Franšois-Xavier Michel Marie Roger Chief Financial Officer & Executive Vice President
Paul Bulcke Chairman
Stefan Palzer Chief Technology Officer & Executive VP
Magdi Batato Head-Operations & Executive Vice President
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