On June 17, UK-based ingredient supplier and developer Provexis announced its $13 million purchase of sports nutrition firm Science in Sport (SiS). SiS offers a full line of sports products, including drinks, bars, gels and supplement powders, which it markets in the UK and internationally.
According the June 17 press release from Provexis, SiS garnered USD $7 million in 2010 revenue.
Provexis—a publicly-traded company with USD $24 million in fiscal 2010 sales—is better known for its work outside the sports nutrition arena, as its proprietary ingredients are most often targeted at ameliorating inflammation. And while sports nutrition is often considered one of the more unregulated and overwrought of supplement sectors, Provexis holds a reputation as a science-first innovator. Case in point, the company’s new Fruitflow tomato extract is one of a select few ingredients to receive EU approval for a qualified heart health claim.
NBJ Bottom Line
Nutrition Business Journal contended in its February 2011 Sports Nutrition issue that mergers and acquisition were on the rise in the sports space. The trend continues.“Provexis believes the acquisition price is attractive in the context of recent deals in the sports nutrition market,” the June 17 press release reads.
And while many of the recent deals were obviously synergistic—feature Glanbia buying BSN and Optimum Nutrition as direct outlets for its whey ingredients—many more were simple purchases or equity investments, highlighting the value of sports nutrition companies as cash generators.
From a consumer perspective, a sports enthusiast takes a supplement, exercises, gets stronger or faster, and continues to buy the supplement. The bodily feedback is more visceral and immediate than most supplements, especially for energy drinks, which helps promote repeat sales. So even suppliers without vested interest in the sports nutrition industry—Provexis—have something to gain from the purchase of a sports nutrition brand—profits.
The Provexis deal also intersects with another trend, that of ingredient suppliers moving downstream into consumer sales. For one, Provexis recently signed a partnership agreement with DSM, such that DSM would market Fruitflow to consumers. And now, with the SiS acquisition, Provexis has added another downstream link in its supply chain.
NBJ offers a business primer on vertical integration in the nutrition industry in its 2011 Nutrition Industry Overview double issue, which publishes in July. To order a copy or become a subscriber, please visit the NBJ subscription page.