WHAT’S NEXT // Next Target
VITAMINS & SUPPLEMENTS U.S.- and Canada-based nutrition-focused businesses in the health and wellness category, with vitamins or supplements as keywords. COMPANY SIZE
GEOGRAPHY
1-50 employees
Most companies based in California, New York and Texas
173
51-250 employees
26
251-5,000 employees
20
46 94 45
OWNERSHIP Independently owned
244
Investor backed Private subsidiary Private equity add-on
74 13
M&A TRENDS 8 M&A EVENTS
in 2021 (highest recorded since 2007)
1
variety of vegan, nut-free and nonGMO snack bars. “Some of the larger companies have brands that aren’t growing well and need to supplement the legacy brands with up-and-coming brands,” Gerson says. When it comes to large public companies, they often also get rewarded with a pop in their stock price for acquiring some of these labels. “They can get immediate synergies to ramp up distribution,” Gerson adds. Capstone’s Wasik agrees: “Strategics are very active and aggressive right now.” When it comes to public companies, “their stocks are being rewarded for making smart acquisitions,” he says. In many cases, smaller companies that are struggling with supply chain issues and rising costs can benefit from being acquired by a large strategic. “Shipping costs can be cut by
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half in some cases. It helps to be with a larger company that can minimize disruptions and increase your product’s reach in the market,” says Wasik. According to company intelligence engine Grata, there are 747 healthy food companies across the U.S. and Canada, 88% of which are independently owned. The companies usually describe themselves as “betterfor-you,” organic or non-GMO. Last year, there were 16 deals in the healthy food space, according to Grata, the highest recorded since 2007.
Supplements and Fitness
There has also been a flurry of activity in supplements, vitamins and fitness apps, with many of the supplement brands selling to large international strategics. Some of the recent deals included Bayer buying Care/of; Nestle and KKR investing in The Bountiful Company; and Unilever buying Onnit.
Some of the larger companies have brands that aren’t growing well and need to supplement the legacy brands with up-and-coming brands. Hershel Gerson Co-Head of Consumer Investment Banking, Roth Capital Partners
As many people continue to work remotely, they are focusing on their health and fitness needs. They’ve also begun to think more about weight management and supplements, sector advisors say. “There is a lot of action in supplements. People had more time at home and rethought their supplement needs,” Wasik says. Some are geared toward general nutrition, others toward dieting and weight loss. Medical professionals have also pointed to zinc and Vitamin D as helpful supplements to battle COVID-19 infections. Grata research shows 332 companies in the vitamins and supplements category located in the U.S. and Canada, 244 of which are independently owned. About 52% of them are small businesses with under 50 employees. These kinds of companies saw eight M&A events last year, the highest recorded by Grata since 2007. Fitness apps and at-home workout
Data provided by Grata
3/3/22 1:12 PM