Cranbury, NJ — Innophos Holdings, Inc. (NASDAQ: IPHS) announced on Tuesday that it entered into a definitive merger agreement to acquire Novel Ingredients, a New Jersey-based provider of dietary supplement ingredient solutions primarily owned by GenNx360 Capital Partners, a New York-based private equity firm. The merger will create a nearly half-billion-dollar enterprise, the company said.
Under the terms of the merger agreement, Innophos will acquire all of the outstanding shares of Novel Ingredients for a total purchase price of $125 million (enterprise value), payable in cash. Closing is expected in the third quarter of 2017.
“The acquisition of Novel Ingredients is an exceptional opportunity for our Company and a significant step forward in achieving our strategic goals,” said Kim Ann Mink, Ph.D., chairman, president and ceo of Innophos Holdings, Inc., in a press release. “This transaction fully aligns with our Vision 2022 strategic priorities to grow our Food, Health and Nutrition portfolio, increase our presence in attractive nutrition end-markets, and develop innovative solutions that better serve our customers. Additionally, it will more closely align Innophos with important consumer mega-trends such as health and wellness, energized aging and clean labels.”
Novel is a specialty ingredient supplier of botanicals, proteins, amino acids and other healthy ingredients, as well as branded ingredient and custom formulated solutions. it serves attractive end-markets driven by health and wellness consumer trends with demonstrated growth in the 4-8% range, such as Immune Health, Sports Nutrition, and Cognitive Health.
Annual cost synergies estimated at $4 million and revenue synergies are anticipated from combined product technology and customer relationships. Present value from tax synergies is estimated at $11 million.
“Bringing Novel Ingredients and Innophos together will create a Food, Health and Nutrition platform of nearly $0.5 billion in revenue representing 60% of our total combined company,” Mink said. “The combined company will benefit from leading, innovative technology; a broader and deeper product portfolio; and access to new market segments.
“In addition to the complementary products and manufacturing assets that we gain, we are acquiring Novel Ingredients because of its experienced and dedicated people,” Mink added.
“We are delighted at the prospect of becoming part of Innophos,” said Rick Antonoff, Novel Ingredients’ ceo, in the statement. “We believe that joining the Innophos team … will present exciting opportunities to expand our business into new market adjacencies. We look forward to working closely with the Innophos team to ensure a smooth transition.”
(Published on Whole Foods Magazine Online, 8/1/17)