Nutrition Capital Network (NCN), an organization that connects growing companies in the nutrition and health and wellness industry with investors, saw a slow-down in mergers and acquisitions, but an increase in financings during the first half of the year.
The number of mergers and acquisitions in the nutrition and health and wellness space was down by almost 40 percent to just 50, according to NCN’s Transaction Database*. M&A deals that did take place, however, increased significantly in size compared to the previous period. Notable big-ticket transactions included Pfizer’s $360 million acquisition of Alacer in supplements, DSM’s $540 million purchase of Ocean Nutrition in ingredients, the merger of Sprouts and Sunflower natural food retail chains, and Campbell Soup’s $1.6 billion acquisition of Bolthouse Farms.
On the other hand, the number of investment and financing transactions increased significantly, by 44 percent, in the first six months of 2012, compared to 2011, with 39 investments tracked.
“As the pool of acquisition-ready “big brands” dries up, investors are increasingly turning their attention to medium-sized businesses who are well positioned for growth”, says Grant Ferrier, an NCN principal and co-founder. “This is good news for the types of companies that present at NCN’s Investor Meetings,” notes Ferrier.
“Some of them come to sell their business, but most are growing businesses looking for $1 to $5 million in growth capital to fuel their expansion.”
Either way, earlier-stage nutrition and health and wellness companies should see increased interest this year from the 50 to 70 investor groups representing well over $30 billion in capital who are typically in attendance at NCN meetings, according to Ferrier.
NCN has a successful track record of matching entrepreneurs, growth companies and technology innovators with suitable investors and strategic partners. Of the 252 companies that have presented at the 14 NCN Investor Meetings from 2007 to 2011, 41 percent have completed a transaction.
Past presenters that have closed significant transactions include Food Should Taste Good, a company acquired by General Mills in February 2012, in addition to Annie’s, Immaculate Baking, Zico, Zhena’s Gypsy Tea and mix1.
NCN’s Fall Investor Meeting in San Francisco, Calif., on Oct. 15-16 will feature 10-minute presentations by 18 to 22 qualified presenting companies, followed by opportunities for structured one-on-one meetings, as well as informal networking.
Prior to its October Investor Meeting, NCN will be offering a free educational session at Expo East, on Sept. 20 in Baltimore, Md., where experienced investors and companies who successfully raised capital will share best practices. More information is available at: nutritioncapital.com.
*NCN’s Transaction Database tracks deals according to seven industry segments, including supplements, natural & organic food, functional food, ingredients, retail and distribution, contract manufacturing, personal care and household goods. The database is available to NCN’s more than 30 Cornerstone Investors.