Ingredients sale transforms Atrium into pure nutrition company

Canada's Atrium presently has a portfolio of finished products targeted towards growing segments for the food and supplements market, including healthy living and meeting the needs of a healthy population.

Its ingredients division, which it has now sold for a total of $166.4m (subject to post-closing working capital adjustment), caters to the needs of the cosmetics, pharmaceutical, chemical and nutrition industries.

Amongst the 2000 products it holds are around 50 high value-added ingredients for skin care and anti-ageing, mainly for cosmetics.

But Atrium chairman Mr Pierre Laurin said last month, when the company reported its Q1 financial results, the sale - and for a good price - "will give us the means to execute our strategy to become the leader in high end nutritional supplements".

The company has indicated that the cash it has earned from the sale will provide it with "better financial flexibility to pursue its corporate strategy" .

In February, the company acquired Multicare BV, a Dutch supplements company - a deal the company said "respects perfectly its strategic acquisition strategy".

It includes the well-known Orthica brand.

This gave it new strength in Europe, to complement its acquisition last July of German enzyme product company Mucos Emulsions.

Atrium said in its financial results announcement on May 6 that integration of Mucos is going according to plan.

The company has signalled that more acquisitions are in the pipeline, but neither potential targets nor a timeline are known.

The indications are that the active ingredients and specialty chemicals divisions is a thriving one.

In Q1 2008, ended March 31, it generated revenues of $68m - up 15.6 percent on the same period of last year.

Indeed, this was over half of Atrium's revenues for the three months, with revenues from its continuing operations coming in at $65.8m. Profit (EBITDA) for the ingredients and chemicals division was $6.5m, compared to $5.3m for Q1 2007, and for continuing operations $18.4m.

A spokesperson for Atrium told NutraIngredients-USA.com that the sale has not come about because the ingredients division was not a good business.

Quite the opposite, in fact.

Rather, it wanted to focus on one sector, rather then spreading itself across cosmetics and pharmaceuticals as well as supplements.

Given the different industry focus, Atrium is not expected to be a major client of its former ingredients and chemicals division in the future.

AXA Private Equity, which also acquired French ingredients firm Diana Naturals last year, has big plans for its newest business.

Eric Neuplanch, managing director, said in April that there are plans to double the business in the next five years through a combination of organic growth and acquisitions.

The main focus will be on the US and Europe.