DAVY VIEW

Nestlé’s acquisition of a majority stake in Orgain bolsters its growing supplements/nutrition platform. The deal follows the recent acquisitions of Nuun, Vital Proteins and The Bountiful Company. In a relatively short period, Nestlé has become a major player in the US supplements market, sending a strong signal on its view of structural category growth. Orgain brings a leading market position in plant-based proteins to the platform. The acquisition is expected to be slightly accretive to growth, while slightly dilutive to margin in FY22. Terms of the deal were not disclosed but we estimate a mid-single-digit EV/sales multiple before synergies.