Nestle is in talks to acquire Nature's Bounty owner

[ZURICH] Nestle SA confirmed it's in discussions to acquire vitamin maker Bountiful Co, potentially expanding in a segment the company entered under the five-year watch of Chief Executive Officer Mark Schneider.

KKR & Co had been planning an IPO valuing Bountiful at more than US$6 billion, Bloomberg News reported in January. An acquisition by Nestle could preempt the initial public offering, Bloomberg reported Friday, citing a person familiar with the matter.

Mr Schneider dove into the field of vitamins and supplements in his first year as CEO in 2017 with the US$2.3 billion acquisition of Atrium Innovations Inc. By doing so, he reversed course, as predecessor Paul Bulcke, who now is chairman, ruled out the segment, arguing it was too competitive a line of business. Mr Schneider has been buying larger brands of vitamins, trying to get pricing power and appeal to high-spending health-conscious consumers as Nestle simultaneously sheds other businesses such as US chocolate.

The strategy has delivered, with Nestle reporting sales growth at double the pace analysts predicted last week. Supplements and minerals that boost the immune system are in high demand, and e-commerce has become an effective way to sell such products, the company said. Nestle Health Science's revenue rose almost 10 per cent in the first quarter on an adjusted basis.

Bountiful sells a wide range of vitamins that are available in retail chains such as Walmart, CVS and Rite Aid. Supplements and vitamins are attractive targets during the pandemic, which has boosted demand for products that are advertised as helping consumers' health and immune systems.

The company, which sells nutritional products under brands including Nature's Bounty and Puritan's Pride, filed registration documents for the listing earlier this month.

BLOOMBERG