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Nutrition Investors Start 2010 with Guarded Optimism

If you want the inside scoop on investment activity within the U.S. nutrition industry, turn to David Thibodeau. As a managing director in Canaccord Adams’ Investment Banking Group, Thibodeau focuses on mergers & acquisitions and public and private financings in Canaccord Adams’ Health, Wellness & Lifestyle franchise. Nutrition Business Journal recently sat down with Thibodeau to recap the significance of the big deals that transpired last year in the U.S. nutrition industry and discuss the general mood of investors as we move into 2010.

NBJ: How would you describe the overall mood in the financial/investment community right now?

David Thibodeau: We’re seeing investors start the year with guarded optimism. In the second half of 2009, we saw both the equity markets and the M&A markets come back to life. There were two very successful IPOs in the nutrition space last year: Vitamin Shoppe and In the fourth quarter of 2009, approximately 69 IPOs were filed with the SEC—this was a much more robust number than we saw during fourth quarter of 2008, when only seven companies filed to go public. The prevailing feeling is that the equity markets are open and will be open through at least the first half of 2010. We also saw renewed interest from private equity in the back half of 2009. Reasonable levels of leverage are creeping back into the market, and this is helping to support recent private-equity backed transactions.

NBJ: 2009 wasn’t a particularly active year for investment or M&A deals in the nutrition industry. Of the deals that did occur, what do you believe was most significant and why?

DT: 2009 was the year of the strategic deal. Any of the deals that were consummated could be considered significant: We saw a multi-level marketing company enter the healthcare practitioner space through the Alticor-Metagenics deal; big pharma re-entered the nutrition space through the Sanofi-Aventis purchase of Chattem; and an international supplement company predominantly focused on the healthcare practitioner channel, Atrium, entered the health food/specialty channel through its purchase of the supplement company Garden of Life. Taken as a whole, these transactions suggest a fundamental shift within the nutritional supplement playing field. These moves by large, well-financed acquirors point to a newfound acceptance of the health benefits and profit potential of the nutritional supplement space. I believe we will continue to see significant strategic moves in 2010.

NBJ Subscribers can read the full Q&A with Thibodeau in the upcoming Awards and Executive Review issue, which publishes later this month. Subscribe to NBJ or download a free sample issue via the NBJ Website.

Related NBJ links:

Atrium Solidifies Standing in Natural and Specialty Retail with Garden of Life Acquisition

Sanofi-Aventis Purchase of Chattem Puts Dexatrim, Garlique Brands in French Hands

M&A and Investment Activity Slows for U.S. Nutrition Industry

Metagenics CEO: We Need Alticor’s Backing to Make a Dent in Chronic Illness Epidemic

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