Atrium buys Seroyal for $110 million

Atrium buys Seroyal for $110 million

Canada's Atrium Innovations continues its acquisition spree in a purchasing strategy that appears to be paying off for the supplement manufacturer and marketer.



Quebec City-based supplement manufacturer and marketer Atrium Innovations announced in a January 4 press release its purchase of Ontario-based Seroyal International for a cash consideration of $110 million, which closed on December 31, 2010. Seroyal markets the Genestra, Unda and Pharmax lines of supplements through the healthcare practitioner channel, with 65% of its sales in Canada and 35% in the United States. The company recorded revenues of $40 million in calendar 2010, and will push Atrium’s EBITDA past the $100 million mark.

Seroyal offers Atrium greater presence in Canada’s practitioner supplement market, and together with its U.S.-based Pure Encapsulations and Douglas Laboratories companies, solidifies its standing in the overall North American practitioner channel. “This acquisition adds premium, high margin and complementary brands to Atrium’s family of products,” said Atrium’s president and CEO, Pierre Fitzgibbon, in the press release. “Within our multi-channel strategy, we envision some cross-selling opportunities with these new brands and some operating synergies.”

NBJ Bottom Line

Atrium appears to be on a veritable spending spree of late, acquiring Seroyal, MinamiNutrition, TrophicCanada, GardenofLife and Nutri-Health Supplements all within the last two years, though the acquisition strategy seems to be paying off. Atrium is developing into an NBTY-esque empire under Fitzgibbon’s reign, but he appears to be building it upon different premises. While NBTY was apt to take over struggling companies and rebuild them into profitable brands, Atrium takes a more laissez-faire approach, buying lucrative companies and leaving their strong management teams in place. “At Atrium, we preach a balanced approach to integration,” said Fitzgibbon in a recent interview with NBJ. “While we want to maintain entrepreneurship—the DNA of the brand—we must reap all available synergies. The value creation comes from working together as a group and moving in the same direction.”

Both companies have built success from aggressive approaches to acquisition, developing diverse manufacturing capabilities and multichannel distribution piece by piece. Atrium currently operates seven manufacturing facilities, including enzyme and probiotic production at Arizona-based Nutri-Health; high-purity omega-3 products from newly acquired Belgian manufacturer Minami Nutrition; and custom manufacturing at Pittsburgh-based Alacrea. Its practitioner companies and European brands bestow an air of quality, and Atrium also operates successful lines in North American natural & specialty retail with Garden of Life and Trophic Canada.

Going forward, though, Atrium’s next acquisition target should be a company with a strong presence in online retail. NBJ pegs growth of internet supplement sales at 15% in 2009, the fastest growth of any supplement sales channel, and Atrium lacks a strong presence in this space. In any case, Fitzgibbon’s acquisitive outlook and aggressive growth strategy have earned him the kudos of NBJ, and Atrium continues to expand its North American might.

For more on Pierre Fitzgibbon and Atrium Innovations, be sure to read NBJ’s January 2011 Achievement Awards & Executive Review issue, out later this week. To order or become a subscriber, please visit the NBJsubscription page.

Related NBJ links:

What's Required to Complete an Investment or M&A Deal in Today's Environment?

Internet Once Again Leads Direct Channels in Growth of Nutrition Industry Sales

Fitzgibbon: Research Bar Being Raised for Supplements

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