Innophos Acquires NutraGenesis for $28M

11/6/17

Innophos Holdings, Inc. (NASDAQ: IPHS) announced today that it has acquired NutraGenesis, a Vermont-based marketer of proprietary, branded and science-backed nutraceutical ingredients.

Under the terms of the purchase agreement, Innophos has acquired all of the outstanding equity interests of NutraGenesis LLC, Icon Group LLC and Tradeworks Group, Inc., together referred to as NutraGenesis, for a total purchase price of $28 million in cash. Innophos has funded the acquisition with borrowings under its existing credit facility. The acquisition is expected to be accretive to Innophos' earnings per share in the first year following the close of the transaction.

"The addition of NutraGenesis' innovative, science-backed branded ingredients to our Food, Health and Nutrition portfolio more closely aligns Innophos with consumer mega-trends such as health and wellness, energized aging and clean labels," said Kim Ann Mink, Ph.D., Chairman, President and Chief Executive Officer of Innophos Holdings, Inc. "This transaction builds on the recent acquisition of Novel Ingredients, and further strengthens our position as a leading specialty ingredient solutions provider to attractive end-markets. In addition, NutraGenesis' asset-lite business model, complementary capabilities and established presence in high-growth nutraceutical markets make this a high-value addition for Innophos."

NutraGenesis, A Science-Based, Proprietary, Branded Ingredients Solutions Provider

  • Strong and established portfolio of branded ingredients supplying leading U.S. and international developers of branded nutritional ingredients
  • Highly complementary to recent Novel Ingredients acquisition and Innophos' branded ingredients portfolio
  • Proven track record of partnering with clients to transform ingredients into marketable brands backed by scientific data that supports product efficacy and performance claims
  • Serving attractive high-growth end-markets, including stress reduction, weight management, joint health, brain health and metabolic wellness, that are driven by health and wellness consumer trends

Acquisition Delivers Strong Shareholder Value

  • All-cash transaction consideration of $28 million financed by existing credit facility
  • LTM sales of ~$12m, and accretive adjusted EBITDA margin of 22%
  • Strong double-digit historical growth trajectory and outlook
  • Asset-lite business model
  • Accretive to earnings per share within the first year of combined operations
  • Minimal impact on leverage
  • Continued strong cash conversion cycle supports current dividend and strategic growth ambition

"Bringing NutraGenesis into our branded ingredients portfolio provides an immediate opportunity to combine their branding and marketing expertise with our sourcing, manufacturing and technology capabilities, to offer more differentiated ingredients solutions to our customers," Mink commented.

"We are confident that the acquisition of NutraGenesis will strengthen our growth profile and create sustainable value for our customers and shareholders," Mink said. "We remain focused on building out our Food, Health and Nutrition platform, driving sustainable growth and advancing toward our Vision 2022 goals."

Lazard acted as financial advisor to Innophos on the transaction and Baker Botts LLP served as Innophos' legal advisor.

Alantra acted as financial advisor to NutraGenesis and Downs Rachlin Martin PLLC acted as NutraGenesis' legal advisor.

About the Company

Innophos is a leading international producer of specialty ingredient solutions that deliver far-reaching, versatile benefits for the food, health, nutrition and industrial markets. We leverage our expertise in the science and technology of blending and formulating phosphate, mineral and botanical based ingredients to help our customers offer products that are tasty, healthy, nutritious and economical. Headquartered in Cranbury, New Jersey, Innophos has manufacturing operations across the United States, in Canada, Mexico and China. For more information, please visit www.innophos.com. 'IPHS-G'

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