EU Business Round-Up: Probi Targets Acquisitions, Oystershell Heads To US, Doetsch Grether Inks Swiss Deal
Executive Summary
Probiotics player Probi will use deals and organic growth to double its sales over five years; Belgium's Oysershell strikes deal with Bayer for head-lice brand; and Doetsch Grether acquires Swiss supplements firm Vita.
Probi Ready For M&A
Probiotics development firm Probi AB is on the look out for acquisitions as it seeks to double its sales by 2027.
The Swedish firm said it would use a combination of organic growth and strategic deals to lift annual sales from SEK626m ($734m) in 2019 to in excess of SEK1.2bn over the next five to seven years. The target for annual organic sales growth is to exceed 7% and the EBITDA margin to be at or above 29% on an annual basis.
With this ambitious plan now in place, Probi said it would begin active investigation of potential acquisitions that could strengthen the company’s existing business geographically or in complementary product areas.
Commenting on these plans, Probi’s CEO Tom Rönnlund said the company was raising its ambitions after completing a strategic review of its financial goals.
“We see clear trends driving the interest in, and use of, probiotics,” Rönnlund noted. “A continued greater focus on personal health, increased life expectancy and new areas of application for probiotics are some examples. Probi is well-positioned to be a world leader in the probiotics market, especially in the premium segment where we have a solid research base.”
Reflecting this growing demand for its probiotics, Rönnlund revealed Probi had recently signed a pan-European partner agreement with an unnamed “major consumer healthcare company” for the launch of a concept based on Probi's premium products in 15 countries in Europe from 2021.
Probi announced its plans as it reported second-quarter turnover flat at SEK180m, as COVID-19 lockdowns around the world impacted sales.
Oystershell Strikes Bayer Deal
Belgian consumer health player Oystershell is poised to enter the US market after snapping up the rights to head-lice treatment brand Rid from Bayer.
Recognized for its “strong consumer brand awareness, high levels of professional endorsement and its well-known brand logo and attributes,” Rid was one of the leading brands in lice treatment in the US, Oystershell claimed. In 2019, Rid achieved $25m in sales, making it the second largest brand in its consumer health category.
Oystershell’s private-equity owner Gilde Buy Out Partners said the acquisition of Rid would give the company a direct presence in the largest OTC market in the world, “in a niche market that is well known to Oystershell” through brands Elimax and Pistal.
“Over the past 10 years the Oystershell Innovation Lab has established industry-leading scientific know-how in the development of highly effective lice treatment products which makes Oystershell Consumer Health ideally positioned to modernize and build this trusted brand,” commented CEO Mike Van Ganse.
“Rid is a very strong brand in the US with significant potential for further growth that will be driven by product innovations and strong marketing from our consumer health team.”
Doetsch Grether Grows At Home
Doetsch Grether has expanded its presence in its domestic market with the acquisition of Swiss food supplements player Vita Health Care.
Noting that the deal was in line with its stated growth strategy, Doetsch Grether said Vita Health Care AG was an excellent fit with its existing supplements portfolio. As a sales and marketing organization, Vita had been distributing supplements of “the highest Swiss quality” since 2000, the firm noted, in categories such as eye and joint health.
The timing for the takeover was optimal, Doetsch Grether said given the rising demand for supplements during the COVID-19 pandemic. The underlying dynamics were also positive, the firm added, with the Swiss supplement market Switzerland having grown by around 6% annually for the past few years.
Valentino Cè, chairman of the board at Doetsch Grether, said, “We are proud of this acquisition because it combines quality and Swiss heritage in a growth area that is central to us.”
Vita Health founders Urs Bodmer and Christoph Nussbaum, commented, “In Doetsch Grether we have found an owner who is long-term oriented with a focus on high quality that will help us to advance our growth in Switzerland.”