Nestlé SA is in talks to buy the maker of Nature’s Bounty vitamins for a price in the mid-single-digit billions, according to people familiar with the matter, as the Swiss food giant pushes further into nutritional offerings.
Nestlé could finalize a deal to buy the Bountiful Co. as soon as next week, some of the people said, though it isn’t guaranteed they will reach an agreement. Bountiful has been planning an initial public offering and could still opt for that path after all, or a different deal.
In addition to Nature’s Bounty vitamins, Bountiful’s brands include Pure Protein, which makes protein bars, Osteo Bi-Flex joint-care supplements and Puritan’s Pride vitamins and supplements.
Bountiful is majority-owned by private-equity firm KKR KKR 2.57% & Co. In a filing for the IPO earlier this month, Bountiful called itself the largest pure-play nutrition company in North America and one of three largest in the world.
Nestlé has signaled it plans to make bigger acquisitions this year and that bulking up in nutrition is a priority as wellness becomes increasingly important for consumers. With 8.6 billion Swiss francs in cash at year-end (equivalent to $9.4 billion now) and a market value of about 310 billion francs, it certainly has the wherewithal to do a deal for Bountiful.
The company agreed to sell its North American water business for $4.3 billion in February and inked a deal to buy ionized alkaline water brand Essentia Water in a small transaction soon thereafter. Nestlé, with brands including Haagen-Dazs ice cream and Nespresso coffee pods, this week reported organic sales growth of 7.7% for the first quarter. That marked its best quarterly sales performance in nearly a decade, driven by coffee sales to consumers stuck at home during the pandemic.
For years, consumer-goods companies have been paying up to add health and wellness products to their offerings as consumers spend more on self-care and products meant to stave off sickness or slow aging. Nestlé has limited or no presence in vitamins; its health-oriented brands include Boost nutritional drinks and Gerber baby foods.
In the IPO paperwork, Bountiful noted it had net sales of more than $2 billion in fiscal year 2020. The business, previously known as Nature’s Bounty, was founded in 1971 as a subsidiary of a pharmaceutical company. It is based in Ronkonkoma, N.Y. The company once had a retail arm in Europe, Holland & Barrett, that it agreed to sell in 2017.
KKR in 2017 agreed to take a majority stake in a deal that valued Bountiful at around $3 billion. It bought the stake from private-equity firm Carlyle Group Inc., CG 2.82% which in 2010 agreed to take the company, then named NBTY Inc., private in a $3.8 billion deal. Carlyle retained an interest.
Write to Miriam Gottfried at [email protected] and Cara Lombardo at [email protected]
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