NEW YORK, April 5 Santa Cruz Nutritionals and Nellson Nutraceutical LLC are looking for buyers as the latest firms in the nutrition sector hoping to cash in on large companies' hunger for healthy products, three sources familiar with the situation said.
Santa Cruz, a California-based maker of calcium gummies and vitamin jelly beans, and Nellson, which makes nutrition bars and powders, are both being advised by investment bank Houlihan Lokey, said one of the sources. The sources, who spoke to Reuters this week, declined to be identified as both processes are private.
Santa Cruz, the more profitable of the two, could fetch as much as $350 million, said one of the sources, adding that Nellson, also based in California, may be worth around $150 million.
Houlihan declined to comment. Santa Cruz and Nellson were not immediately available for comment.
Spurred by an aging population and a growing consumer interest in health, the vitamin and supplement business is seen as increasingly attractive. In the United States alone, annual revenue for the sector was estimated to top $29 billion last year, according to IBISWorld.
Reckitt Benckiser's $1.4 billion purchase of Schiff Nutrition last year boosted valuation expectations for the sector. Reckitt paid about 16.5 times Schiff's estimated earnings before interest, tax, depreciation and amortization for fiscal year 2013. That compares to an average earnings multiple of 12.5 times for the sector, according to an industry banker.
Also last year, Church & Dwight Co Inc, the maker of Trojan condoms, acquired gummy vitamin maker Avid Health, and Pfizer bought the maker of Emergen-C vitamin C products.
Canadian vitamin maker Jamieson Laboratories has also held talks about selling itself, Reuters reported in December.