NCN News for October 19, 2017

TSG and LuckyVitamin founder acquire company from GNC
TSG Consumer Partners and founder Sam Wolf are partnering to acquire LuckyVitamin (Conshocken, Pa.) from global supplement retailer GNC Holdings Inc. (Pittsburgh, Pa.). Founded in 2005, LuckyVitamin is an e-commerce business offering nutritional supplements, natural and organic foods, sports nutrition, and beauty items. LuckyVitamin sales totaled around $40 million when GNC bought the business in 2011 to expand its reach in the e-commerce channel. In FY2016 revenues in GNC’s U.S. and Canada segment were $2,143.6 million, with e-commerce sales—primarily and LuckyVitamin—contributing 8.9% for the year. In an interview with the Philadelphia Inquirer in early 2016, Wolf said LuckyVitamin had sales approaching $100 million.

HIPPEAS raises growth capital from CAVU Venture
HIPPEAS (Los Angeles, Calif.), a maker of chickpea snacks, has announced a $10 million investment from CAVU Venture Partners. CAVU’s co-founder and managing partner Brett Thomas will join the company’s board of directors. Launched a year ago, the brand is sold in Starbucks, Whole Foods, Wegmans, Kroger, Albertsons, Safeway, Boots, Waitrose, Tesco, Sainsbury’s, and Thrive Market.  HIPPEAS said it expects to triple 2017 revenue in 2018. The new growth capital comes on the heels of an investment earlier this year from Leonardo DiCaprio and Strand Equity Partners.

Pfizer reviews strategic alternatives for consumer healthcare business
Pfizer Inc. (New York, N.Y.), the owner of Centrum, Caltrate and Emergen-C supplements, is reviewing strategic alternatives for its Consumer Healthcare business, including sale or spin-off. Pfizer Consumer Healthcare had 2016 revenues of approximately $3.4 billion out of total company revenues of $52.8 billion; top consumer brands include Centrum, Advil, Robitussin and ChapStick. The move follows a trend by pharmaceutical companies to divest their consumer units. In September Merck announced an interest in selling its consumer health business, which includes the Seven Seas fish oil and vitamins brand. In January Boehringer Ingelheim exchanged its consumer healthcare business for Sanofi’s animal health business. Ian Read, Pfizer chairman and CEO, noted that Pfizer’s Consumer Healthcare is distinct enough from its core biopharmaceutical business for its value to be more fully realized outside the company.

Cooke to acquire Omega Protein
Cooke Inc. (Saint John, NB, Canada), parent of Cooke Aquaculture Inc., will acquire Omega Protein Corporation (Houston), a provider of specialty nutritional oils and protein products, in a transaction valued at approximately $500 million. Omega Protein operates seven manufacturing facilities in the United States, Canada and Europe and more than 30 sea vessels to harvest menhaden, a fish that yields omega-3 fish oil, fishmeal and aquaculture feed ingredients. Cooke originally focused on aquaculture but has diversified into wild fisheries. Cooke CEO Glenn Cooke said: “Omega Protein will provide us with another platform in Cooke’s growth strategy through further diversification in the supply side of the business.”

MeriCal acquires Global Health Industries in probiotics manufacturing
MeriCal LLC (Anaheim, Calif.), a developer and contract manufacturer of probiotics and other nutritional supplements and owned by Linden Capital Partners, is to acquire Global Health Industries (GHI, Ogden, Utah). GHI makes custom supplements and has special expertise in probiotics. CEO of GHI Kim Wheelwright said: “The combination of MeriCal’s #1 market position in the private label retail space for large, blue chip customers combined with our broad, branded customer base makes the combined company extremely powerful.” The collective organization will employ nearly 550 individuals at six sites across the United States. GHI also has multi-level marketing and branded manufacturing and sales expertise. MeriCal has been in business since 1965.

Kerry acquires probiotics developer Ganeden
The Kerry Group (Tralee, Ireland) has acquired probiotic company Ganeden (Cleveland, Ohio) for an undisclosed amount. The deal, which complements Kerry’s 2015 acquisition of Wellmune, strengthens the company’s nutrition portfolio, particularly in immune and digestive health. Ganeden has revenue of approximately $25 million and more than 135 patents for technologies in the nutrition, food, beverage, and personal care markets. Kerry Group Chief Executive Edmond Scanlon said Kerry expects to “achieve 3% to 5% volume growth annually on a Groupwide basis, with Taste & Nutrition targeting 4% to 6% growth and Consumer Foods targeting 2% to 3% growth.” In 2015 Kerry spent $735 million to acquire three U.S.-based businesses to expand its portfolio: Arrow Products, Island Oasis, and Wellmune.

Kellogg to acquire RxBar for $600 million
The Kellogg Co. (Battle Creek, Mich.) has agreed to acquire RxBar whole food protein bars (Chicago, Ill.) for $600 million, with an eye on millennial shoppers, clean nutrition labels, and a more diversified channel presence. RxBar’s net sales are expected to be approximately $120 million in 2017. The bars contain no gluten, soy, dairy or added sugar; ingredients are listed in bold on the front of the wrapper. According to Seeking Alpha, Kellogg is paying a 12-14 times multiple after tax benefits are included, which are expected to reduce the effective purchase price to $400 million. According to 1010Data, online health bar sales totaled $80 million during the first seven months of 2017. Share of online sales were led by Quest Nutrition (25%), RxBar (14%), and ThinkThin (6%); however, RxBar topped the category for growth with online sales up by five times year over year. RxBar, which is owned by Chicago Bar, will operate independently after the deal, Kellogg said.

FoodMarble raises early stage funding for food breathalyzer
FoodMarble (Dublin, Ireland), the developer of a digestive tracking device, has secured £1.3 million ($1.7 million) from investors, led by Breed Reply with participation from accelerator SOSV, The Irish Times reported. Financing will be used to market the Aire breath analyzer, a device designed to help people who struggle with digestive problems by finding which foods are causing their symptoms. When certain foods are not digested properly, gasses such as hydrogen are released by gut bacteria, enter the bloodstream, and are exhaled. If the device detects increases in hydrogen in the breath, it indicates higher levels of bacterial fermentation in the gut after eating certain foods. FoodMarble was founded in Dublin in early 2016. Chief executive and co-founder Aonghus Shortt got the idea for Aire while looking for a solution to help his girlfriend who has food allergies.

Destination Pet raises $30 million in debt and equity funding
Destination Pet LLC (Sammamish, Wash.), a provider of pet care services including boarding, grooming, and veterinary care, has raised $30 million in debt and equity funding led by McLarty Capital Partners. Opus Equity Partners, which invested in Destination Pet earlier this year, also participated. The funding will enable Destination Pet to expand nationally by acquiring and building pet care businesses to join its network of Destinations.

GrowLife secures funding to support business strategy
GrowLife Inc. (Kirkland, Wash.) has secured additional funding from Chicago Venture Partners. GrowLife provides hydroponics equipment, plant nutrients, and other goods and services to specialty grow operations. The new funds will support the company’s 2017-2018 expansion plan to capture clients in the organics, greens, and plant-based medicine industries. The firm’s five-pillar strategy is comprised of GrowLife Hydroponics; GrowLife Products (own-brand supplies and financial services); GrowLife Eco e-Logistics, an online marketing and distribution channel; GrowLife Licensing; and GrowLife Cube Subscription, a consumer-targeted indoor “grow it yourself” subscription package.

Beyond Meat adds Leonardo DiCaprio
Beyond Meat added Leonardo DiCaprio to its investor list. Beyond Meat’s plant-based Beyond Burger, a vegan patty that looks and cooks like beef, complete with beet-juice blood is now sold in more than 2,000 stores, including stores owned by Kroger and Albertsons, is also sold at fast food chains BurgerFi, Epic Burger and Veggie Grill. Beyond Burger plans to expand to thousands of food chains, hotels, hospitals, and school cafeterias with partnership with the food-distribution company Sysco.  According to PitchBook, Beyond Meat has raised $96 million starting from a $2 million Series A in 2011 with round in every year and now two rounds in 2017. Investors include Closed Loop Capital, Obvious Ventures, Kleiner Perkins Caufield & Byers, Jungju Kim, S2G Ventures, Bill Gates, New Crop Capital, GreatPoint Ventures, General Mills, Tyson Foods and The Humane Society of the United States.

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