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Probi acquires Nutraceutix to expand North American presence

Probi USA Inc. is purchasing probiotic manufacturer Nutraceutix to increase its North American market share; add technologies and manufacturing capabilities; and expand its customer base.

Probi AB subsidiary, Probi USA Inc., is purchasing the U.S. probiotic company TNTGamble Inc., which does business as Nutraceutix, the company announced Monday. 

Probi AB will pay $105 million on a cash and debt-free basis. The acquisition will increase Probi's market share in North America — the largest and fastest-growing probiotic dietary supplements market in the world — more than three-fold; add important new technologies, manufacturing capabilities and customers; and create a strong platform for further acquisitions.

The two companies' 2015 net sales would have totaled 506 million Krona or about $62.3 million, according to a statement from Probi. The sale is expected to be complete in about four months, Probi reported.

Peter Nählstedt, CEO of Probi, said in a statement, “I am very excited about this transforming acquisition. Nutraceutix is an excellent match for us. Probi and Nutraceutix have complementary business models, limited customer overlap and share strong entrepreneurial values. The acquisition creates a strong platform to continue the growth story in the US and in the global market.”

In the same statement, CEO Nutraceutix Tim Gamble said, “I cannot imagine a better combination of two well-respected organizations. With highly complementary expertise, assets, product offerings and a shared strategic focus on quality-conscious growth, I envision an outstanding future for the new entity.

“The transaction will result in the creation of a global leader in the probiotics and probiotic dietary supplement space, and will open up a wealth of new opportunities for the company, its employees and its customers,” he said.

Because the acquisition combines proven, proprietary and patented delivery technology from Nutraceutix with Probi’s well-documented strain portfolio, it is expected to enable novel, differentiated probiotics products. It also secures access to established, good manufacturing practice-compliant and versatile manufacturing capabilities with important strategic and financial benefits.

In addition, the sale will give Probi approximately 200 customers and partners in the United States and put the company in the top tier of corporations in the global probiotics sector.

The cash purchase price will be financed through available cash reserves, a credit facility and a bridge facility. The bridge facility will be repaid by proceeds from a proposed new share issue with preferential rights for existing shareholders of approximately SEK 600 million, or $73.8 million.

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