irish independant

Glanbia moves into protein bar market with $217m deal

Glanbia has agreed to acquire California-based high protein bar company thinkThin in a deal worth $217m (€202m).

The newly acquired firm posted profits of $84m in the first nine months of the year.

The deal will give Glanbia a bigger presence in the fast growing consumer market for protein supplements in the US.

Company chief executive Siobhán Talbot has made no secret of her plan to boost growth in the US consumer business, and Davy Stockbrokers analyst Jack Gorman believes that the move is a bid to tackle the mass market.

“I think the business and management have identified the mass market as an area that they were under-penetrated,” Mr Gorman said.

“So this, and I suppose with the recent launch of Trusource, which is their own internal brand, is kind of the first steps into that market for them.” Glanbia intends to fund the deal through debt. The company is seen as having more than enough firepower on its balance sheet for such a deal.

A jubilant Ms Talbot described the move as an “excellent strategic acquisition”.

“As a premium lifestyle nutrition product with very strong brand equity, thinkThin represents an excellent strategic addition to our portfolio of market-leading performance nutrition brand,” she claimed.

“The transaction is firmly aligned with our overall growth ambitions and positions us well in the fast growing nutrition bar category as well as being value enhancing for our shareholders,” Ms Talbot said.

The company said that the acquisition will boost its sporting nutritional arm, Global Products Nutrition (GPN) by allowing it to move into the ‘better for you’ snack category.

While the deal is expected to be concluded before year end, Mr Gorman said that it will not be until 2016 before the real effects of the acquisition will be seen in the profit and loss accounts.

The nutritionals division is the fastest growing of Glanbia’s businesses. Last year revenue from nutritionals grew 12pc to €746m.

Shares in the company rose 1.6pc on the news, closing at €17.32. The stock is up 53pc in the past 12 months.

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