San Diego, Calif.-based Nutrition Capital Network (NCN), which connects growing companies in the nutrition and health & 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 & acquisitions in the nutrition and health & wellness space was down by almost 40 percent to just 50, according to NCN's Transaction Database.
M&A deals that did take place 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-$5 million in growth capital to fuel their expansion."
Either way, earlier-stage nutrition and health & wellness companies should see increased interest this year from the 50-70 investor groups representing well over $30 billion in capital who are typically in attendance at NCN meetings, according to Ferrier.
