Glanbia plc, the international nutritional ingredients and cheese group, is pleased to announce the acquisition of Bio-Engineered Supplements and Nutrition (BSN®), for a total consideration of US$144 million (€108 million). The business is being acquired on a debt free basis and is expected to be earnings enhancing in 2011. The acquisition is funded through Glanbia’s existing banking facilities.
BSN is a leading developer, provider and distributor of nutritional products designed for health, training, physique development and performance. BSN is headquartered in Boca Raton in Florida and employs 140 people in its operations. The business was previously privately owned.
BSN was founded in 2001 and since then has become a leading US performance nutrition business. Its products are shipped to over 40,000 retail outlets in the USA and distributed in over 90 countries worldwide. BSN products and brand have won more than 30 sports nutrition awards in the last five years and this has created excellent brand awareness and product loyalty. All its products are multi-functional and apply to a wide range of lifestyles and consumers. It is a pioneer in pre-workout powders and a market leader in this category. Another core product area is protein powders, where Optimum Nutrition (acquired by Glanbia in 2008) is a market leader. In addition, BSN provides a choice of related performance nutrition products.
In 2009, BSN had net revenue of US$135.4 million (€101.3 million) and earnings before interest and tax (EBIT) of US$10.1 million (€7.6 million). Adjusted EBIT amounted to US$16.3 million (€12.2 million).
The Board of Glanbia believes that the acquisition of BSN significantly enhances the Group’s Performance Nutrition portfolio and delivers further growth opportunities in this area.
In particular, the acquisition: Builds on the Group’s scale position in the attractive, high growth, higher margin, sports nutrition sector; Broadens Performance Nutrition’s product portfolio into new categories and channels; Represents a further step change in international growth opportunities for Performance Nutrition; Offers innovation and new product development opportunities through combined R&D; and Continues to develop Glanbia in line with the Group’s international growth strategy.
Glanbia trading update and outlook
In a separate announcement today Glanbia issued a 2010 full year trading update which confirmed that 2010 adjusted earnings per share growth is expected to be approximately 20%. Inclusive of the benefits of the BSN acquisition, Glanbia is forecasting adjusted earnings per share growth for 2011 (on a constant currency basis) of 11% to 13%.
Announcing the acquisition today, John Moloney, Glanbia Group Managing Director, said:
“BSN is an excellent strategic fit with our Performance Nutrition business and adds strong brand and market positions that complement and extend our portfolio. Since the acquisition of Optimum Nutrition we have established a market leading, scale position in the attractive, high growth, global sports nutrition sector. BSN is a very exciting acquisition for us and we are pleased to welcome the BSN team to Glanbia. Global Nutritionals is now a €600 million revenue business, a position we have built organically and by acquisition in just over five years.”
About Glanbia plc
Glanbia plc is an international nutritional ingredients and cheese group, headquartered in Ireland. Glanbia has over 4,000 employees worldwide, including Joint Ventures and Associates. The Group has three business segments – US Cheese & Global Nutritionals, Dairy Ireland and Other Business. Glanbia also has three principal international joint ventures – Southwest Cheese in the USA, Glanbia Cheese in the UK and Nutricima in Nigeria – as well as a number of small Irish-based joint ventures and associates. Glanbia is listed on the Irish and London Stock Exchanges (Symbol: GLB).
About Performance Nutrition
Similar to Optimum Nutrition, acquired by Glanbia in 2008, BSN’s core demographic stems from professional athletes and bodybuilders but this consumer base is growing quickly. Through product ‘normalisation’ the benefits of sports and performance nutrition is being recognised in power sports, endurance sports, amongst exercise enthusiasts and people who are focused on health and fitness lifestyle choices. The global sports nutrition market is estimated at retail selling prices to be in the region of US$4.5 billion in 2010 and is estimated to be growing in excess of 6% per annum. The key performance nutrition brands in Glanbia’s portfolio are ON and BSN. The ON brand essence is TRUE STRENGTHTM with a brand promise that only the best goes into ON. Key products in its range are protein powders and performance supplements. The BSN brand essence is WINNING WITH STYLE with a brand promise of cutting edge physique and performance. Key products in its range are pre-work out powders and shots, protein powders, snacks and beverages and performance supplements. 2009 proforma Global Nutritionals revenue is €490 million, representing 22% of 2009 proforma total Group revenue, including Joint Ventures & Associates.
This announcement contains “forward-looking statements”. These statements have been made by the directors in good faith based on the information available to them up to the time of their approval of this announcement. Due to the inherent uncertainties, including both economic and business risk factors, underlying such forward-looking information, actual results may differ from those expressed or implied by these forward-looking statements. Further no obligation is undertaken to update any forward-looking statements in this announcement.