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Glanbia acquires leading U.S. performance nutrition business

Glanbia has announced the acquisition of Bio-Engineered Supplements and Nutrition (BSN®), for a total consideration of $144 million.

Glanbia plc, the international nutritional ingredients and cheese group, has announced the acquisition of Bio-Engineered Supplements and Nutrition (BSN®), for a total consideration of US$144 million (€108 million). The business is being acquired on a debt free basis and is expected to be earnings enhancing in 2011. The acquisition is funded through Glanbia’s existing banking facilities.

About BSN

BSN is a leading developer, provider and distributor of nutritional products designed for health, training, physique development and performance. BSN is headquartered in Boca Raton in Florida and employs 140 people in its operations. The business was previously privately owned.

BSN was founded in 2001 and since then has become a leading US performance nutrition business. Its products are shipped to over 40,000 retail outlets in the USA and distributed in over 90 countries worldwide. BSN products and brand have won more than 30 sports nutrition awards in the last five years and this has created excellent brand awareness and product loyalty. All its products are multi-functional and apply to a wide range of lifestyles and consumers. It is a pioneer in pre-workout powders and a market leader in this category. Another core product area is protein powders, where Optimum Nutrition (acquired by Glanbia in 2008) is a market leader. In addition, BSN provides a choice of related performance nutrition products.

In 2009, BSN had net revenue of US$135.4 million (€101.3 million) and earnings before interest and tax (EBIT) of US$10.1 million (€7.6 million). Adjusted EBIT amounted to US$16.3 million (€12.2 million). At the year-ended December 2009, BSN had gross assets of US$30.5 million (€22.8 million). The business has delivered a good performance in 2010.

Strategic rationale

The Board of Glanbia believes that the acquisition of BSN significantly enhances the Group’s Performance Nutrition portfolio and delivers further growth opportunities in this area.

In particular, the acquisition:

  • Builds on the Group’s scale position in the attractive, high growth, higher margin, sports nutrition sector;
  • Broadens Performance Nutrition’s product portfolio into new categories and channels;
  • Represents a further step change in international growth opportunities for Performance Nutrition;
  • Offers innovation and new product development opportunities through combined R&D; and
  • Continues to develop Glanbia in line with the Group’s international growth strategy.

Announcing the acquisition, John Moloney, Glanbia Group Managing Director, said:

“BSN is an excellent strategic fit with our Performance Nutrition business and adds strong brand and market positions that complement and extend our portfolio. Since the acquisition of Optimum Nutrition we have established a market leading, scale position in the attractive, high growth, global sports nutrition sector. BSN is a very exciting acquisition for us and we are pleased to welcome the BSN team to Glanbia. Global Nutritionals is now a €600 million revenue business, a position we have built organically and by acquisition in just over five years.”

Conference call

At 08:30 am (GMT) today, Glanbia will host a conference call for investors and analysts. Dial in details as follows:

Ireland 01 2421074 UK 01296 317 500 Europe +44 1296 317 500

USA 171 835 41175 Access code for participants 214812

About Glanbia plc

Glanbia plc is an international nutritional ingredients and cheese group, headquartered in Ireland. Glanbia has over 4,000 employees worldwide, including Joint Ventures and Associates. The Group has three business segments—US Cheese & Global Nutritionals, Dairy Ireland and Other Business. Glanbia also has three principal international joint ventures—Southwest Cheese in the USA, Glanbia Cheese in the UK and Nutricima in Nigeria—as well as a number of small Irish-based joint ventures and associates. Glanbia is listed on the Irish and London Stock Exchanges (Symbol: GLB).

About Performance Nutrition

Similar to Optimum Nutrition, acquired by Glanbia in 2008, BSN’s core demographic stems from professional athletes and bodybuilders but this consumer base is growing quickly. Through product ‘normalisation’ the benefits of sports and performance nutrition is being recognized in power sports, endurance sports, amongst exercise enthusiasts and people who are focused on health and fitness lifestyle choices. The global sports nutrition market is estimated at retail selling prices to be in the region of US$4.5 billion in 2010 and is estimated to be growing in excess of 6% per annum. The key performance nutrition brands in Glanbia’s portfolio are ON and BSN. The ON brand essence is TRUE STRENGTH™ with a brand promise that only the best goes into ON. Key products in its range are protein powders and performance supplements. The BSN brand essence is WINNING WITH STYLE with a brand promise of cutting edge physique and performance. Key products in its range are pre-work out powders and shots, protein powders, snacks and beverages and performance supplements. 2009 proforma Global Nutritionals revenue is €490 million, representing 22% of 2009 proforma total Group revenue, including Joint Ventures & Associates.

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