Sports nutrition firm to double in size with £32m acquisition
A sports nutrition firm has announced that it is splashing out £32m to acquire the firm behind a market leading protein brand.
Lancashire based Science in Sport develops, manufactures and markets sports nutrition products for elite athletes and sports enthusiasts.
The company has announced the proposed acquisition of PhD Nutrition which is based in Willerby near Hull for a total consideration of £32m.
SiS has completed a placing to raise approximately £29m in order to fund the majority of the cash consideration of the acquisition.
Stephen Moon, chief executive of SiS, said: “The acquisition of PhD is highly complementary, doubles the size of our business and accelerates our ambition to become a global leader in premium performance nutrition.
“It is a compelling combination that will deliver a wider product offering, including premium protein, provide broader consumer reach and greater international presence, and dovetails our respective strengths in retail and e-commerce channels.
“Operating in a rapidly developing market, we see this transaction as an important step towards winning on the global stage. With the clear synergies and growth prospects of the combined group we anticipate delivering strong returns.”
PHD is one of the UK’s leading protein brands with a reputation for high quality and innovative products aimed at sports enthusiasts and gym lifestyle consumers
The firm’s core sales channel will increase revenue growth through its Amazon sales channel.
It has an established and growing international presence in over 45 countries across Europe, the Middle East, China and Australia.
The company also has an experienced management team that has a track record of delivering consistent revenue growth and profitability.
For the year ended 31 August 2018, PhD generated revenue of £20.8m and had adjusted EBITDA of £2.8m.
Speaking to TheBusinessDesk.com this morning, Mr Moon said the acquisition is part of the ongoing expansion of the combined group.
PhD has a factory near Hull and offices in Leeds, while SiS employs 65 staff at its Nelson plant and operates a London office.
Mr Moon said: “This is not a rationalisation. We see both companies continuing to grow.”
He said the combined business, worth £350m from 2019, will be earnings enhancing: “It will be profitable, and increasingly so as the years unfold.”
And he admitted the deal had been on the SiS agenda: “PhD is a brand we have admired for a while.”
Both companies will retain their separate identities, which are significant in their respective markets: “They are two very distinct sorts of brands which will keep their separate identities,” said Mr Moon.
“SiS leads in endurance nutrition, but that’s quite a niche category, whereas protein is very large around the world.”
He added: “We are small, but have international reach.”
SiS operates in 70 countries, and in the past six weeks has launched in three new markets, in China, Ecuador and Argentina.
