A leading industry analyst has said that Glanbia's acquisition of weight management brand SlimFast will 'significantly expand' the group's exposure to the fast-growing ready-to-drink segment, as well as lifestyle consumers.
Jason Molins of Goodbody Stockbrokers was commenting following the announcement this morning that the dairy giant had signed an agreement to acquire SlimFast for $350 million.
Molins said that the transaction should be "modestly accretive to earnings (1-2%) in its first full year of ownership", adding that while the transaction adds to the business' pro forma net debt/EBITDA, it still provides Glanbia with around "€300 million of available headroom for further M&A" activity.
He added that the deal is likely to be "well-received" by investors.
Thought-Provoking
Elsewhere, Cathal Kenny of Davy Stockbrokers said that Glanbia's acquisition of SlimFast is "arguably its most thought-provoking since Optimum Nutrition in 2008", and is the "the first time that Glanbia has acquired a storied brand with mass awareness".
Kenny said that the deal makes sense on a number of levels: "it facilitates entry into the adjacent weight management category, deepens GPN’s presence in the developing food, drug, mass and club (FDM) channel and up-weights its exposure to the fast-growing ready-to-drink (RTD) format.
"We expect Glanbia to augment the acquired portfolio via internal innovation and platform capabilities while sustaining the continued rejuvenation of the brand."
Performance Nutrition
Commenting on the deal this morning, Glanbia said that it will integrate SlimFast into its Performance Nutrition arm.
“SlimFast is an established and enduring brand and, along with nutritional supplements brands 'Healthy Delights' and 'Nu-Therapy', complements our existing portfolio targeting lifestyle consumers. It plays to global consumer trends focused on convenient formats and snacking," commented said Siobhán Talbot, group managing director of Glanbia.
"The transaction is in line with our strategic ambition to extend the reach of our Glanbia Performance Nutrition portfolio to related consumer needs.”
The transaction is expected to close before the end of 2018, subject to the customary completion conditions, agreed closing accounts and regulatory approval.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
