Glanbia seals 'strategic' €300m deal for SlimFast brand
Glanbia is paying $350m (€302m) to buy SlimFast, the weight-loss and health and wellness brand popular across Ireland, the US, and the UK.
The price tag for the loss-making business is slightly below the $400m (€345m) speculated figure that was placed on SlimFast when its current owners - Kainos Capital and Unilever - put it up for sale at the start of the year.
SlimFast markets a range of ready-to-drink shakes, powders, bars and snacks, as well as a range of new products.
The sale underscores how far the value of the brand has slumped in the past two decades. Florida-based SlimFast, founded in 1977 by Thompson Medical, used to be wholly-owned by Unilever, which paid $2.6bn (€2.2bn) for the company in 2000.
But the acquisition quickly soured for the consumer goods giant. In 2005, Unilever slashed the value of SlimFast by €650m under Dutch and UK accounting standards, and then by another €200m under International Financial Reporting Standards (IFRS), acknowledging the acquisition was a failure for the group.
Later that year, Unilever took another €353m write-down on SlimFast.
SlimFast's sales had slumped 20pc in 2004, hit by the popularity of the Atkins Diet.
But while it took a hit, lever retained it as part of the group.
It then sold a majority share in the company in 2014 to Kainos Capital, a mid-market Dallas-based private equity company that specialises in acquiring and managing food and consumer brands. The purchase price wasn't disclosed at the time. Unilever recorded a €305m impairment in 2014 related to the SlimFast business.
Glanbia has a strong track record in the health and wellness sector that SlimFast is part of. Glanbia CEO Siobhan Talbot said SlimFast will be an "adjacency" to the group's existing performance nutrition portfolio and will complement those products. "It plays to global consumer trends focused on convenient formats and snacking," she said. "The transaction is in line with our strategic ambition to extend the reach of our Glanbia Performance Nutrition portfolio to related consumer needs."
Glanbia said that SlimFast posted net sales of $212m (€183.1m) last year, and adjusted earnings before interest, tax, depreciation and amortisation of $24m (€20.7m). It made a net, pre-tax loss of $12m (€10.3m).