Chinese group to acquire Australian vitamin firm Vitaco in A$314 mn deal
Australian vitamins maker Vitaco Holdings has caught the attention of a Chinese group led by drugmaker Shanghai Pharmaceuticals Holding Co Ltd and private equity firm Primavera Capital. An agreement between the two parties has been made for the complete sale of Vitacofor A$313.7 million.
In a recent statement, Vitaco said the Chinese group would buy all of the firm at a valuation of A$2.25 per share, a 28% premium to their closing price on August 3, less than a year after it listed shares in Sydney at A$2.10 apiece.
Shares in Vitaco, which owns brands such as Nutra-Life, Wagner and Abundant Earth, has seen the stock plunge over 40% from a high of A$3.23 last November, in the month after it listed.
The company said the deal would help it grow in the world’s second-largest economy, where vitamins and dietary supplements business is expected to surge to around US$20 billion by 2018, according to Euromonitor. That growth is luring firms to look for local tie-ups or tap the market for traditional remedies.
Vitaco chairman Greg Richards said in a statement the deal was attractive for shareholders given the “ongoing volatile macroeconomic conditions and regulatory uncertainty in China”.
While China is a major destination for Australian goods, Beijing’s move last April to raise tariffs and tighten controls on some imports clouded the business outlook for some players.
According to Shanghai Pharma, it would take a 60% stake of Vitaco for around 938 million yuan (US$141 million) as part of a take-private deal with Primavera. It said the deal would combine its own networks and sales channels in China with Vitaco’s high-quality healthcare brands.
The Vitaco buyout comes less than a year after Hong Kong-listed Biostime International Holdings bought larger Australian vitamin maker Swisse Wellness for around US$1 billion in 2015 to build on strong Chinese demand.
Category: Features, Pharmaceuticals
