Atrium Innovations Inc. (TSX: ATB), a leading developer, manufacturer, and marketer of science-based and professionally supported products for the health and nutrition industry, announced today the purchase of Garden of Life, Inc., a leading formulator, distributor and marketer of nutritional supplement products.
Garden of Life products are sold in nearly 12,000 U.S. health food and specialty retail outlets, including major chains as well as in thousands of independent stores. The company is widely recognized throughout the fast-growing U.S. and Canadian nutritional supplement industries as a leader in innovation, efficacious and science-based products. With annualized revenues of approximately US$52 million, the company's premium high-quality products and loyal customer following have established Garden of Life as a leader in the U.S. nutritional supplements industry.
"By joining forces with Garden of Life, we strengthen Atrium's footprint in the health and nutrition industry and rapidly expand our participation in a growing market segment," stated Pierre Fitzgibbon, Atrium's President and CEO. "This new distribution channel complements our strength in the health care professional segment. Together with our Direct to Consumer business, Atrium is well-positioned to respectively offer to each of these channels a portfolio of quality, science-based products that are specifically designed to meet our customers' needs."
Under the terms of the transaction, Atrium will pay Garden of Life an initial consideration of US$35 million, US$32.5 million in cash, of which US$12 million is coming from the working capital, and US$2.5 million in the form of newly issued common shares in Atrium. Moreover, Atrium will assume a bank debt of US$2.5 million. An adjustment payment will be made at the end of fiscal year 2009. The initial purchase price is based upon a 6.5 multiple of the actual 2009 earnings before interest, taxes, depreciation and amortization ("EBITDA"). Earn-out payments have also been structured and will be based upon a percentage of incremental EBITDA in 2010 and 2011 above a minimum growth level. Manufacturing synergies will be ascribed to Atrium as they are not part of the earn-out payments and this transaction is immediately accretive.
Significant Acquisition Synergies
"This acquisition offers Atrium significant opportunities for synergy and growth," continued Mr. Fitzgibbon. "We will distribute our flagship product, Wobenzym, through the Garden of Life network of health food and speciality stores. In addition, over time we will begin to manufacture the majority of the Garden of Life products in Atrium's GMP manufacturing facilities. Further, by leveraging our larger critical mass, we will be able to provide more scientific support for our product offerings. Atrium has a strong track record of successfully integrating complementary businesses, delivering growth and efficiencies while preserving their successful cultures."
Jordan Rubin, CEO and founder of Garden of Life, Brian Ray, President, and the other members of the company's management team will retain their positions following this transaction.
"We are extremely excited to join a company like Atrium that shares our commitment to excellence, innovation and entrepreneurialism. I'm confident that our alliance will be highly beneficial to both companies, as well as to the steadily growing number of consumers seeking high-quality products that they can rely on to help them stay healthy," commented Jordan Rubin.
"Messrs. Rubin and Ray are visionary, determined and dynamic individuals who will undoubtedly enrich our organization; we are very pleased to welcome them to our company. The Garden of Life team brings Atrium a track record of innovation and expertise in marketing in the health food and specialty store segment. Garden of Life and Atrium's U.S. business units will benefit greatly from pooling knowledge and resources to carry out business development, research and innovation initiatives," concluded Mr. Fitzgibbon.
About Garden of Life and its Products
Founded in 2000, Garden of Life has quickly distinguished itself as a leader in the health and nutrition industry through its innovative spirit, professionalism and rigour, developing products in close collaboration with health care professionals, including physicians, scientists and nutrition specialists.
Among its many products, Garden of Life has developed supplements promoting digestive health, including Perfect Cleanse(TM), the top seller in its category in the United States. Garden of Life also markets the probiotic supplements Primal Defense(R), a top selling probiotic supplement in the U.S. healthy foods channel over the last eight years. The company also distributes a wide range of Omega 3 supplements, vitamins, antioxidants, and proteins marketed under the CODmega(R), Oceans 3(TM), Vitamin Code(R), Living Multi(R), Fruits of Life(TM), Goatein(R), fucoTHIN(R) and Perfect Food(R) labels. Garden of Life has also developed food supplements, including an entirely organic coconut oil, the third-best selling health cooking oil in the United States.
Among the fastest-growing U.S. companies in the field of nutritional products and supplements, Garden of Life has successfully launched several new products and brands in the past two years. The company's efficient marketing strategy is supported by a direct sales team of more than forty sales representatives. The company has over 110 employees, doesn't have any manufacturing facilities and is based in West Palm Beach, FL. Additional information about Garden of Life is available on its website at www.gardenoflife.com.
Conference Call and Webcast
Atrium will hold a conference call and webcast to discuss the acquisition of Garden of Life on Monday, September 21, 2009, at 11:00 a.m. Eastern Time. Participants may access the call by using the following numbers: North America access number 1-888-231-8191, international access number 1-647-427-7450. A live webcast is also available via the Company's website at www.atrium-innovations.com in the Investors section. A replay of the webcast will also be available on our website for a period of 30 days.
About Atrium Innovations
Atrium Innovations Inc. is a recognized leading developer, manufacturer and marketer of science-based and professionally supported products for the health & nutrition industry. The Company focuses primarily on growing segments of the health and nutrition markets which are benefiting from the trends towards healthy living and the ageing of the population. Atrium markets a broad portfolio of finished products through its highly specialized sales and marketing network in more than 35 countries, primarily in North America and Europe. Atrium has over 900 employees and operates seven manufacturing facilities. Additional information about Atrium is available on its website at www.atrium-innovations.com.
Cautionary note and forward-looking statements
This press release contains certain forward-looking statements with respect to the Company. These forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by these forward-looking statements. The Company considers the assumptions on which these forward-looking statements are based to be reasonable, but cautions the reader that these assumptions regarding future events, many of which are beyond its control, may ultimately prove to be incorrect since they are subject to risks and uncertainties that affect the Company. For additional information with respect to these and other factors, see the Company's quarterly and annual filings with the Canadian securities commissions. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.