Innophos snaps up ingredient supplier NutraGenesis

NutraGenesis, which is based in Brattleboro, VT, distributes a variety of branded ingredients including Sensoril, Natreon’s patented leaves and root ashwagandha extract​. The company also distributes ingredients based on medicinal mushrooms, bergamot fruit and amla, or Indian Gooseberry. The company sells into the dietary supplement and functional foods markets.

Innophos, which is based in Cranbury, NJ, has had a goal to become more diversified in human nutrition.  The NutraGenesis acquisition is the second such in recent months.  The company completed a $125 million acquisition of Novel Ingredients in August.​

Details of the deal

Under the terms of the purchase agreement, Innophos has acquired all of the outstanding equity interests of NutraGenesis LLC, Icon Group LLC and Tradeworks Group, Inc., together referred to as NutraGenesis, for a total purchase price of $28 million in cash. Innophos has funded the acquisition with borrowings under its existing credit facility. The acquisition is expected to be accretive to Innophos' earnings per share in the first year following the close of the transaction.  

"The addition of NutraGenesis' innovative, science-backed branded ingredients to our Food, Health and Nutrition portfolio more closely aligns Innophos with consumer mega-trends such as health and wellness, energized aging and clean labels,"​ said Kim Ann Mink, PhD, chairman, president and CEO of Innophos Holdings, Inc. "This transaction builds on the recent acquisition of Novel Ingredients, and further strengthens our position as a leading specialty ingredient solutions provider to attractive end-markets. In addition, NutraGenesis' asset-lite business model, complementary capabilities and established presence in high-growth nutraceutical markets make this a high-value addition for Innophos.​”​

During the company’s recent third quarter earnings call at the end of October, which was posted in transcript form on the site seekingalpha.com, Mink said the Food, Health and Nutrition (FHN) space has become a key focus.  The company has put together a division called Innophos Nutrition to house the new acquisitions. It’s part of a strategic directive to pivot away from the company’s traditional focus on specialty phosphates, which Mink said now exhibit all of the characteristics of a mature market: slow growth, pressure on margins and little opportunity for breakthrough technology​.

During the call, which came before the NutraGenesis announcement, Mink seemed to indicate that the company is far from done.

“​We have a robust pipeline of acquisition targets that we are actively evaluating to further expand our FHN platform advance our goal of being a leading specialty ingredient solutions provider to attractive FHN markets and more closely align Innophos with consumer mega-trends such as health and wellness, energized aging, and clean labels,​”​ Mink told the analysts.

 ​