Nestle nears deal for protein powder maker Orgain

[NEW YORK] Nestle agreed to acquire a majority stake in Orgain, a maker of protein powders and other products, confirming an earlier report by Bloomberg.

Butterfly Equity and Orgain founder and chief executive officer (CEO) Andrew Abraham will "retain significant minority ownership positions", according to a statement Wednesday (Feb 2). Abraham will stay on as CEO. Terms of the deal weren't disclosed.

Los Angeles-based Butterfly began exploring a sale or initial public offering of Orgain last year, valuing the company at about US$2 billion, Bloomberg News reported at the time. Orgain, founded in 2009, sells products for adults and children including powders, bars, shakes and almond milk.

The transaction is the latest move by Nestle chief executive officer Mark Schneider, whose portfolio transformation and turnaround at the world's largest food company has been lauded by investors and analysts.

Schneider has overseen a series of acquisitions in recent years to bolster Nestle's health and wellness portfolio, adding to faster-growing categories that have helped it return to mid-single-digit sales growth.

Last year, Nestle snapped up companies including nutritional supplement provider Bountiful and hydration-tablet maker Nuun & Co.

The CEO hasn't shied away from disposing of lagging businesses either, jettisoning a US confectionery unit and mass-market bottled-water brands, as well as its skincare business.

Food-focused buyout firm Butterfly took a majority stake in Orgain in 2019, according to a statement at the time. Ontario Teachers' Pension Plan, a limited partner of Butterfly, joined in that transaction as a minority stakeholder.

Bank of America, Goldman Sachs Group and Mally Collective were Orgain's financial advisers. Kirkland & Ellis and Giannuzzi Lewendon acted as the company's legal advisers. BLOOMBERG