Nutrition Capital Network (NCN), an organization that connects investors with high-potential growth companies in the nutrition and health and wellness industry, has announced that the industry is on track to match the number of deals reported in 2012 despite a slight cooling in the pace of transactions.
In 2012, merger and acquisition (M&A) and investment activity benefitted from pent-up demand due to tough market conditions in prior years. Early numbers from the NCN Transaction Database for the first six months of 2013 indicate that the nutrition and health and wellness industry remains well ahead of 2009-2011 in terms of total transactions (acquisitions and financings combined), while average deal size is on par with 2012.
“We continue to see strong interest from larger companies, and also from venture capital and private equity firms, in the nutrition and health and wellness space,” said Grant Ferrier, NCN principal and cofounder. “In particular, we have seen a shift to more financings for small and mid-size companies compared to acquisitions. This is likely due to a reduction in the number of larger target candidates available in our sector. Instead what we are seeing are investors funding the next generation of promising growth companies.”
By far the most active category for both M&A and financings in the first half of 2013 is healthy food and beverages, with large corporations making strategic acquisitions to broaden their portfolios and increase their reach among more health conscious consumers.
In financings, the lion's share of the action is in early-stage natural and organic food brands, followed by technology plays in wellness-related digital applications, NCN revealed.
In 2013’s larger investments so far, private equity investors continued to feed their appetite for healthy eating establishments: TSG Consumer Partners invested in My Fit Foods and Brentwood Associates invested in Veggie Grill.
“This is where NCN plays an extremely valuable role, by connecting a select number of promising growth companies to a group of 50 to 70 premier investors in the nutrition and health and wellness space in an informal and collegial environment,” said Ferrier
NCN’s next investor meeting is in San Francisco Oct. 28 to 29.
Keen acquisition interest in natural and organic food
Notable acquisitions so far this year include Danone's purchase of $60-million Happy Family, a producer of premium organic food for kids and a former NCN presenting company. Interest in the natural/organic baby food and children’s snack category was further demonstrated by Hain Celestial's purchase of $70 million U.K. company Ella's Kitchen, and Campbell's purchase of $40-million Plum Organics, also an NCN presenting company.
Del Monte's acquisition of Natural Balance in pet foods and Post's acquisitions of the natural/organic cereal and snack businesses Attune and Hearthside illustrated the continuing resolve of conventional food companies to seize strategic opportunities in nutrition and health and wellness.
Emerging natural brands groups
The NCN Transaction Database also indicated the emergence of a handful of up-and-coming acquirers of natural consumer brands. In this category, relative newcomer BandG Foods acquired Pirate Brands and the TrueNorth natural snack brand, while Boulder Brands (formerly SmartBalance) continued its play in gluten-free with the acquisition of U.K.'s Davies Bakery. Hain Celestial also belongs to this set, acquiring Ella's Kitchen in the first half of 2013.
NCN Investor Meetings remaining in 2013
NCN is holding its Fall Investor Meeting on Oct. 28 to 29 in San Francisco, where 20 to 22 selected growth companies will present to an audience of 50 to 70 investment groups, representing over $6 billion in capital. NCN’s annual ingredient- and technology-focused investor meeting follows on Nov. 13 in Las Vegas. With top companies such as Bayer, Danone, DSM, DuPont, Coca-Cola, Hershey’s, Kellogg’s, Pepsi, and Unilever among its distinguished Cornerstone Investors, NCN provides an excellent forum for networking, while NCN Principals offer insights into new trends in the nutrition, natural products, and health and wellness industries.
NCN has convened 16 investor meetings since 2007 and has a successful track record of matching entrepreneurs, growth companies and technology innovators with suitable investors, acquirers and strategic partners. Past presenters that have closed significant transactions include Food Should Taste Good, a company acquired by General Mills in February 2012, in addition to Annie’s, Immaculate Baking, Zico and Zhena’s Gypsy Tea.
Among all companies who have presented at NCN investor meetings, 53 percent have found financing or completed a transaction.
Led by industry veterans and experienced investment professionals, NCN provides cutting-edge, research-based industry knowledge and serves as a gateway to connections, insights and resources that support the continued growth of the nutrition, natural products and health and wellness industries.
Companies invited to apply
NCN invites companies to apply to present their business plans at its two remaining NCN investor meetings in 2013 by applying online (there is no cost for applying) at surveymonkey.com/s/NCNpresenter. More information is available at nutritioncapital.com or by contacting Executive Director Mike Dovbish at [email protected] (415.202.5254).