Weider exits Europe but seeks US acquisitions
and looking for new acquisitions on home turf, following the sale
of Haleko, Europe's biggest sports nutrition business to Croatian
holding company Atlantic Grupa, report Dominique Patton and Jess
Halliday.
Friday's announcement of the Haleko sale, with a price tag in the region of $15 million means that Weider's interest in Europe is now "pretty minimal", according to chief financial officer Joseph Baty, coming as it does on the coat-tails of the divestment of the Weider brand weigh-loss portfolio and the Germany-based Venice Beach apparel brand in 2003.
But rather than just shedding parts of its business, the Utah company is interested in acquisitions that "complement the Shiff business and are clearly synergistic with ongoing operations and marketing strategies," Baty told NutraIngredients-USA.com.
He also said that new products are on the launch-pad. Although unable to divulge details at this time, Baty did say that these will come under the Shiff brand of dietary supplements, which includes Shiff Move Free for joint care and is marketed primarily in the United States.
Haleko, acquired by Weider in 1999 and also based in Germany, has seen declining sales over recent months, reporting a loss from operations of $941,000 for the first nine months to February 2005.
Baty said that Haleko's operating results "may reflect the impact of a less than ideal economy and heightened competitive pressures".
Nonetheless Atlantic Grupa, set up in 2002, will seek to turn around profitability at the company. It already owns the Cedevita supplements business, including a range of vitamin drinks, functional teas, vitamin chews and supplements sold by its distribution unit Atlantic Trade, which also sells international brands like Wrigley, Duracell and Nestle Purina Petcare.
Haleko's core brands - Multipower and Multaben - lead the sports nutrition markets in a number of European countries. It also makes products for private label customers.
Branislav Bibic, secretary general of the holding company said that there would be significant synergies for the firms in distribution terms. Atlantic will benefit from Haleko's distribution channels in western Europe.
For Weider the deal will lead to losses of around $9.6 million in the fourth quarter.
Its third quarter income has already been more than halved - down to $1.2 million, compared to $2.6 million a year earlier - as a result of underperforming "domestic private label sales, as well as weakness in our Haleko business unit's Multipower and Multaben brands," according to Bruce Wood, president and CEO.
