Martek goes vertical with $200m acquisition
The all-cash deal was announced today and means Martek is now the owner of brands such as the probiotic supplement, Culturelle; AZO for urinary tract infections; and Estroven for menopause problems.
Not only has Martek vertically integrated, it has gone vertical outside of the omega-3 space it has existed in since its founding in 1985, something Martek spokesperson, Cassie France-Kelly told NutraIngredients-USA.com the Maryland-based company had been contemplating for a couple of years.
“We are very excited about this acquisition and see it as a very good fit for our ambitions,” said France-Kelly, noting the move did not mark any kind of departure from the omega-3 space, but presented new opportunities for non-omega-3 projects the company had been working on.
“Omega-3 has been our platform but now we have a robust platform of products and a route to market for some of our own branded products. We are a growing company with a lot of research and development going on and we see this as a means to take advantage of some of our expertise.”
How the two companies will integrate has not been defined, but France-Kelly noted that Amerifit was a successful company with successful brands and at least, in terms of the products it already offers, was likely to stay relatively independent.
She said Martek would introduce new products that may not be omega-3 based through its newly acquired channel toward the end of the year.
Happy families
In a statement, Martek CEO, Steve Dubin said: “This new capability will enable Martek to move up the value chain by getting closer to the consumer and should result in increased revenue and gross profit opportunities.”
Amerifit CEO Cyrill Siewert said: “The entire management team here at Amerifit is thrilled to become part of the Martek family. Amerifit’s capabilities of marketing and growing leading consumer brands along with Martek’s promising product pipeline, robust R&D capabilities, and commitment to science-based products is a compelling combination that should provide powerful opportunities for growth in the years ahead.”
The deal sees Martek pay $120m from cash reserves and the remainder drawn from a new credit facility it has set up. It comes at a time many of Martek’s existing exclusivity DHA deals with infant formula makers are approaching expiration,and which represent about 80 per cent of its turnover.
Martek within the last year has said it is facing the expiration of exclusive-supply agreements with 17 of its customers, which represent about 80% of its current sales to the infant-formula market. The company has been working to extend those agreements beyond 2011.
Amerifit Brands was owned by Charterhouse Group, a New York-based private equity firm.
Martek’s stock was up 8.42 percent at $20.61 at 13:15 EST, with about 600,000 shares trading hands.
