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