Unilever PLC
Unilever NV
12 April 2000
UNILEVER TO BUY LEADING US FOOD GROUP
FOR US$ 2.3 BILLION
Unilever has agreed to buy the US-based SlimFast Foods
Company nutrition products and health snack business for US$
2.3 billion (euro 2.4 bln approx) cash.
SlimFast is the major player in the fast growing US$ 1.3
billion (euro 1.35 bln) nutritional supplement and weight
management category.
SlimFast's sales growth was over 20 per cent in 1999, in
a rapidly growing market, and it has gained significant
market share since 1996.
SlimFast will significantly increase Unilever's presence
in functional foods and will become a key brand in this
product portfolio.
Unilever has identified a global consumer concern with
health and vitality and plans to expand SlimFast
internationally.
Internet service offering consumer advice and service in
health and vitality to be developed.
UNILEVER TO BUY LEADING US FOOD GROUP
FOR US$ 2.3 BILLION
Unilever has agreed to buy SlimFast Foods Company, a leading
US-based food business best known for its nutritionally-
balanced products, for US$ 2.3 billion (euro 2.4 bln approx) cash.
SlimFast, a privately owned company, holds 45 per cent of the
US$ 1.3 billion (euro 1.35 bln approx) nutritional supplement and
weight management category - the fastest growing sector of the
US health food business. The acquisition of the SlimFast
shakes and bar range provides the entry for Unilever into this
new sector.
Unilever has identified health and vitality as one of the
global trends among consumers. Growing numbers of adults look
for improved daily health with balanced nutrition as the
primary means to optimise appearance and well-being.
'We are delighted with this acquisition,' commented Unilever
chairman, Niall FitzGerald. 'SlimFast fits perfectly into our
vision for the development of our foods business. It brings
us a world-class brand and a product range growing at over 20
per cent per annum.
'Looking to the future, SlimFast will significantly increase
our presence in functional foods and is ripe for international
expansion. We, better than anyone, have the ability to
continue to bring the benefits of SlimFast to consumers
concerned with health and diet, around the world.'
Unilever will establish SlimFast as one of the key brands in
its functional foods portfolio. Parallel with the development
of this expanded product range through traditional
distribution channels, Unilever and SlimFast will continue to
develop an Internet based platform offering advice and service
in the area of health management and vitality.
SlimFast, which is headquartered in Florida, had net sales of
US$ 611 million (euro 635m approx) and operating profits of US$
125 million (euro 130m approx) for the year ended November 1999.
Its net asset value as of November 1999 was approximately US$
160 million (euro 165m approx). Growth within its market sector
is high, averaging 20 per cent in the past two years.
SlimFast has outpaced this, growing its share over the last
three years.
This performance is based on the success of its established
nutrition products and the successful launch of meal
replacement bars into the United States. Moreover, the entire
SlimFast product line is supported by extensive clinical
studies and has the support of leading experts in the
scientific and medical communities. Currently only six per
cent of SlimFast's sales are outside North America --
primarily in the UK, France and Germany -- and Unilever has
identified opportunities to develop the brand in Europe and
other selected markets.
Unilever is delighted to add the SlimFast management team to
its North American Foods organisation and looks forward to
their continued leadership of the business. Mr S Daniel
Abraham has agreed to continue with the business in the role
of Chairman Emeritus.
The transaction is subject to the necessary regulatory
approvals.
For product and other information, please access:
Unilever website: http://www.unilever.com
SlimFast website: http://www.slimfast.com
SlimFast product shots available via e:mail on request -
Tel: 0171 822 6719
BACKGROUND INFORMATION
Consumers the World Over Want Better Health
In 1998 a team of young Unilever managers anticipating the
consumer of the future (the Foresight Project) identified a
growing world-wide consumer need for better health and well-
being. Market research confirmed that the key consumer
motivation is to feel good everyday addressing such issues as
energy, digestion, weight and appearance.
Weight Management with Balanced Nutrition
The World Health Organisation (WHO) has stated that overweight
and obesity is increasing world-wide at an alarming rate. In
the US, Western Europe, Australia and the largest cities in
the ROW, 40-55 per cent of people are overweight with 15-25
per cent obese. With the modern consumers' busy fast paced
lifestyle, it is not surprising that traditional eating habits
are breaking down (eating three full meals a day is down 30
per cent in the US). However, whilst consumers are seeking
nutritionally balanced meal solutions that are convenient,
they are not prepared to compromise on taste and enjoyment.
SlimFast is a Vibrant Market Leader
Acquisition of SlimFast is consistent with Unilever's
strategy of focusing on strong brands with above average
growth potential. SlimFast sales growth averaged 25 per cent
per annum over the last two years, outpacing market sector
growth. With sales of US$ 611million, SlimFast becomes
Unilever's sixth largest foods brand.
Independent consumer research has profiled SlimFast as a
vibrant brand which offers both a tangible functional benefit
and builds an emotional bond with consumers, creating a core
of highly committed users. The brand has demonstrated the
elasticity to evolve from a weight loss/management core to add
the complementary benefit of balanced nutrition for a healthy
life. Clinical studies support the claim 'Lose weight and
keep it off for life.'
Unilever and SlimFast
Unilever has well established positions in health and
nutrition mainly through its heart health brands. The Unilever
Health Institute has been established to technically support
the functionality of its brands and inspire credibility
amongst nutritionists, leading scientists and health
professionals. Other examples are Unilever's Tea and Health
programme which communicates the health benefits of tea and its Annapurna
brand of fortified salt and wheat flour products in India and
other Asian countries.
Unilever's international reach and deep understanding of the
local needs of consumers and trade customers will carry
SlimFast through the next phase of its development making it
an important force in markets outside the US.
Both Unilever and SlimFast have been using web-based
technology to develop dialogue with consumers in the areas of
health, appearance and nutrition. Coupled with expansion in
the International market place will be the development of
SlimFast into a key player within Unilever's plans for
advising and servicing consumers via the Internet.
SlimFast -- Summary Financial Data
1. Historical Performance
1997 1998 1999
Sales - US$m (current) 390 505 611
Advertising & Promotions 87 102 142
Operating Profit - US$m 76 112 125
Operating Margin % 19.4 22.2 20.5
Operating Profit Growth % 47.4 11.9
2. Geographical split of 1999 sales: USA/Canada 94%, ROW 6%
3. Multiples based on 1999 actuals and US$ 1.74bn as
consideration (net of NPV of goodwill amortisation tax
benefit @ 6.5%)
Sales 2.9
EBIT 13.9
EBITDA 13.0
4. Net assets of US$ 160m acquired
5. On a cash basis the deal is predicted to be accretive in
2001 and on the basis of earnings it is predicted to be
accretive in 2003.
*A Private Investor is a recipient of the information who meets all of the conditions set out below, the recipient:
Obtains access to the information in a personal capacity;
Is not required to be regulated or supervised by a body concerned with the regulation or supervision of investment or financial services;
Is not currently registered or qualified as a professional securities trader or investment adviser with any national or state exchange, regulatory authority, professional association or recognised professional body;
Does not currently act in any capacity as an investment adviser, whether or not they have at some time been qualified to do so;
Uses the information solely in relation to the management of their personal funds and not as a trader to the public or for the investment of corporate funds;
Does not distribute, republish or otherwise provide any information or derived works to any third party in any manner or use or process information or derived works for any commercial purposes.
Please note, this site uses cookies. Some of the cookies are essential for parts of the site to operate and have already been set. You may delete and block all cookies from this site, but if you do, parts of the site may not work. To find out more about the cookies used on Investegate and how you can manage them, see our Privacy and Cookie Policy
To continue using Investegate, please confirm that you are a private investor as well as agreeing to our Privacy and Cookie Policy & Terms.