NCN News for December 13, 2017

Atrium Innovations to be acquired by Nestlé for $2.3 billion

Nestlé (Vevey, Switzerland) will acquire privately held Atrium Innovations (Montreal, Canada), a global developer and manufacturer of science-based nutritional supplements, for $2.3 billion in cash from a group of investors led by Permira Funds. Atrium’s 2017 sales are expected to reach almost $700 million. Atrium owns both healthcare practitioner and specialized retail brands, has more than 1,400 employees, and operates seven manufacturing facilities. Brands acquired by Atrium since 2004 include its largest brand Garden of Life, Pure Encapsulations, Wobenzym, and Douglas Laboratories. Atrium was acquired by Permira in early 2014 in a transaction reported to reflect a total enterprise value of approximately $1.1 billion, including the assumption of debt. The move supports Nestlé’s pursuit of growth opportunities in consumer healthcare to complement the company’s focus on high-growth food and beverage categories, Nestlé said. Atrium will become an independent operating division of Nestlé Health Science. According to Nutrition Business Journal, consumer sales of supplements through the practitioner channel were $3.7 billion in 2016 on 7.8% growth, faster than the supplement industry at large, led by Atrium, Metagenics, and Standard Process.

Nellson acquires bar and powder manufacturer Genysis

Nellson Nutraceutical LLC (Anaheim, Calif.), a manufacturer of branded and private label nutritional bars and functional powders, has acquired Genysis Brand Solutions Inc. (Salt Lake City, Utah). The acquisition strengthens Nellson’s powder production capabilities, expands its product lines and channels, and diversifies its customer mix. According to Jamie Better, CEO of Nellson, this acquisition replicates in powders what Nellson achieved in bars three years ago by acquiring Le Groupe Multibar Inc. in Canada “as it combines two respected functional powder manufacturers to create the clear category leader.” Genysis will operate as a subsidiary of Nellson, and the combined company will have five manufacturing and R&D facilities. Nellson has been a portfolio company of Kohlberg since 2013.

BV Investment takes stake in Precision Nutrition

BV Investment Partners announced a strategic investment in Precision Nutrition (PN, Toronto), a provider of nutrition certification and coaching software and services. Precision Nutrition was co-founded in 2005 by John Berardi and Phil Caravaggio, and provides nutrition coaching certifications and software to fitness and wellness professionals throughout North America, Australia, and parts of Europe. The company’s three-pronged model offers nutrition coaching, nutrition coaching certification, and PN’s ProCoach nutrition coaching SaaS platform. BV Investment will help PN penetrate the fitness professional market, expand into additional market segments, and develop the ProCoach online content and business software platform. BV will own a majority interest in PN, and PN co-founders will maintain a significant interest.

Maple Leaf adds to alternative proteins portfolio

Consumer packaged meat company Maple Leaf Foods (Mississauga, Ont.) is to acquire Field Roast Grain Meat Co. (Seattle, Wash.) for US$120 million. Field Roast is a brand of premium grain-based meat substitutes and vegan cheese products with sales of approximately US$38 million. Products include fresh and frozen grain-based roasts and loaves, sausages and frankfurters, burgers, deli slices and appetizers, and Chao brand vegan cheese slices and entrees. The company was founded in 1997 and employs approximately 200 people in Seattle, Wash. Field Roast complements Maple Leaf’s early 2017 acquisition of Lightlife Foods, a veteran brand of refrigerated plant-based foods, for US$140 million from Brynwood Partners.

Danone Manifesto Ventures invests in Kona Deep water

Danone Manifesto Ventures (Paris, France) has taken a minority stake in the Hawaii-based bottled water company Kona Deep, participating in a $5.5 million financing alongside Grand Crossing Capital and local Hawaiian investors. Kona Deep, which launched in 2015, sources its water 3,000 feet below ocean surface, offering the benefits of “naturally occurring deep ocean electrolytes,” Danone said. “Waters” are one of Danone’s four business lines, generating €4.6 billion in 2016 with growth close to 3% from sales of Evian, Volvic and other brands. Danone’s three other lines are Essential Dairy (€11 billion), Early Life Nutrition (€5 billion) and Medical Nutrition (€1.6 billion). Danone Manifesto Ventures is the corporate venture unit of Danone created in 2016; prior U.S. investments include Farmer’s Fridge and AccelFoods.

Hain Celestial to acquire Clarks UK natural sweeteners

The Hain Celestial Group Inc. (Lake Success, N.Y.) has acquired Clarks UK Ltd. (Newport, South Wales), a producer of natural sweeteners including maple syrup, honey and carob, date and agave syrups. Clarks’ products are sold through retail, food service and industrial channels, generating approximately £7 million in net sales in 2016. “The Clarks brand and products are a strategic fit with the Hain Daniels spreads business… as consumers continue to seek to reduce their sugar intake and look for better-for-you alternatives to refined sugar,” said Irwin D. Simon, founder, president and CEO of Hain Celestial. Hain Daniels in the UK is wholly owned by Hain Celestial.

Ginkgo Bioworks declared a biotech unicorn

Ginkgo Bioworks (Boston) is seeking up to $265 million in Series D funding, according to an article on PitchBook. The financing would value the company at more than $1 billion, qualifying it as the latest “biotech unicorn.” Ginkgo is engaged in enzyme discovery and the development of microbial strains, producing ingredients via fermentation with engineered yeasts. In September 2017 Bayer announced a new joint company with Ginkgo Bioworks focusing on the plant microbiome and nitrogen fixation, minimizing agriculture’s environmental impact. That deal provided a Series A investment of $100 million by its parent companies and Viking Global Investors LP. Bayer is an NCN Cornerstone Investor.

Barilla launches innovation hub and VC fund

The Barilla Group (Parma, Italy), the Italian pasta and bakery giant, has launched a venture capital fund and innovation hub called Blu1877, according to an article from The Spoon posted on Barilla’s website. Blu1877 will provide investment and give entrepreneurs the opportunity to test small-batch production runs at Barilla’s pilot plant.  Barilla has a grown its interest in healthier products and food sustainability over several years. Barilla opened a Center for Food and Nutrition in 2009, launched gluten-free pasta in 2014, and committed to improving the nutritional profile of its products in 2016, replacing palm oil in its bakery portfolio and expanding whole grain and organic products.

Unilever to acquire Sundial inclusive beauty brand

Unilever (Englewood Cliffs, N.J.) will acquire Sundial Brands (Amityville, N.Y.), a natural haircare and skincare manufacturer with 2017 sales of approximately $240 million. Since 1991 Sundial, with brands including SheaMoisture and Nubian Heritage, has championed “inclusive beauty” to address skin and hair care issues traditionally ignored by mass market companies. Sundial Brands was co-founded by CEO Richelieu Dennis, who was born in Liberia, college friend Nyema Tubman, and Dennis’s mother, Mary Dennis. Bain Capital Private Equity took a minority stake in Sundial Brands in 2015. Sundial follows a Community Commerce business model and is a certified B Corp; it will operate as a standalone unit within Unilever with Dennis as CEO and executive chairman. “Sundial’s approach complements the Unilever Sustainable Living Plan to accelerate growth while increasing positive social impact,” Unilever said. Other Unilever acquisitions announced this year include Tazo tea, Pukka Herbs, Mãe Terra natural and organic food, and Sir Kensington’s condiments. Unilever is an NCN Cornerstone Investor.

Red Monkey Foods acquires San Francisco Salt

Red Monkey Foods (Springfield, Mo.), a portfolio company of San Francisco Equity Partners, has acquired San Francisco Salt Company (Hayward, Calif.) from founder Lee Williamson. Red Monkey Foods provides premium store brand organic spices and seasonings. The San Francisco Salt Company, launched in 2002, offers products in the specialty, Himalayan, Epsom and Dead Sea salt categories, distributing to both the gourmet and personal care end markets. Financo, LLC, an NCN Sponsor and Investment Banking Partner, acted as exclusive financial advisor to San Francisco Salt Company in connection with the transaction.

Mars takes minority stake in Kind bars

Mars Incorporated (McLean, Va.) and Kind LLC (New York, N.Y.) have formed a strategic partnership wherein Mars will take a minority stake in the whole foods snack bar maker. Kind will provide Mars with “a pioneering and trusted brand to anchor a newly formed global health and wellness platform,” while Mars will provide Kind with its “proven international model to expand into new markets,” Kind said in a statement. In a letter to the Kind team, founder Daniel Lubetzky, said, “We will continue to operate independently as a privately held company with the same leadership and values, and with our headquarters remaining in New York.” Mars will lead growth of the business outside the U.S. and Canada.

Disruptive Brands will focus on better for you food and bev

Clearlake Capital Group L.P. and Bill Moses, a beverage industry veteran and Co-Founder, former Chairman and CEO of KeVita Probiotic Drinks, have launched Disruptive Brands, an investment platform focused on emerging better-for-you food and beverage brands. Moses will serve as CEO and Co-Chairman of Disruptive Brands. Moses, who co-founded KeVita Probiotic Drinks Inc., served as its Chairman and CEO until the business was sold to PepsiCo in 2016.

Health IQ announces $34.6 million Series C for health conscious life insurance

Andreessen Horowitz has led a Series C round for Health IQ (Mountain View, Calif.), a provider of life insurance for health-conscious people like cyclists, runners and vegans. Health IQ was founded by CEO Munjal Shah in 2013 in the belief that health conscious people are overpaying for life insurance. The company says it presented data and science on health conscious individuals to life insurance carriers and partnered with them to get the lowest rates. Compared to other brokers Health IQ claims buyers can save from 4%-33% off the cost of life insurance. “We believe the best way to change the world’s health is to celebrate the health conscious rather than harass the people who aren’t,” said Shah. To date, the company has raised a total of $81 million mostly from existing investors Charles River Ventures, Ribbit Capital, Foundation Capital, First Round Capital, Felicis Ventures and Western Technology Investments.

Growth capital for natural jerky brand

True Gentlemen’s Jerky, Inc. (San Francisco, Calif.), a healthy snack foods company, is to receive growth capital from One Thousand & One Voices (1K1V), a private family capital fund headquartered in South Africa. Founded in 2015 by college friends, True Jerky offers premium beef and turkey jerky with culinary marinades like Blackberry Merlot and Thai Chili Mango. “True Jerky represents a natural add-on investment to our existing beef protein platform, Beefmaster. It also allows us, in conjunction with our partners at Beefmaster, to bring unique meat-based protein products from Southern Africa into the United States,” said Hendrik Jordaan, president and CEO of 1K1V.

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