NSRGY Nestle SA (PK)

By Giulia Petroni and Pietro Lombardi

Nestle SA has agreed to buy vitamin maker The Bountiful Company's core brands for $5.75 billion excluding debt, in a step to expand its leadership in nutritional offerings as demand for immunity boosters surges world-wide.

The Swiss food-and-beverage giant said Friday that the deal with private equity firm KKR & Co., majority owner of Bountiful, includes vitamins, minerals and supplement brands like Nature's Bounty, Solgar, Osteo Bi-Flex and Puritan's Pride. Bountiful's sports and active-nutrition brands aren't included.

Nestle has previously indicated that it aimed to make bigger acquisitions in high-growth categories this year, the nutrition area being a priority as wellness becomes more important to consumers. Until now, Nestle has had limited presence in vitamins.

In a filing for an initial public offering earlier this month, Bountiful called itself the largest pure-play nutrition company in North America and one of three largest in the world.

Sales of the acquired brands amounted to $1.87 billion in the last 12 months ending March 31, Nestle said. The transaction was valued on a cash free, debt free basis, according to the company.

Nestle added that its underlying trading operating profit margin will be hurt by one-off integration costs in 2021, but margin is expected to increase above average by 2024.

The deal is scheduled to close in the second half of the year, subject to customary conditions and regulatory clearance.

Write to Giulia Petroni at giulia.petroni@wsj.com and Pietro Lombardi at pietro.lombardi@wsj.com

(END) Dow Jones Newswires

April 30, 2021 06:32 ET (10:32 GMT)

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