Kerry Group acquires probiotic player Ganeden to complement existing portfolio

By Nathan Gray contact

- Last updated on GMT

Kerry Group acquires probiotic player Ganeden to complement existing portfolio
Nutrition and food giant Kerry Group has sealed a deal to buy US-based probiotic technology firm Ganeden, the company said.

Speaking at a capital markets day for the food and nutrition company, Kerry said the acquisition of Ganeden will complement the group’s acquisition of Wellmune in late 2015 – noting that Ganeden technologies will be extended into wider applications across Kerry’s global developed and developing markets.

“Kerry Group has a unique scalable business model which I am confident can deliver the continued organic growth of the business across developed and developing markets as planned,”​ Kerry Group Chief Executive Edmond Scanlon told investors. “We are in a strong position to lead the continued consolidation of our industry benefiting from the Group’s strong balance sheet, scalable business model and geographic footprint.”

Ganeden is a globally recognised probiotic player with a huge amount of clinical data backing up its BC30 strain and recently launched Staimune ingredient, in addition to more than 135 patents for technologies in the supplement, food, beverage, nutrition and personal care markets. The company has current year revenues of approximately $25 million USD, Kerry confirmed in its market statement, however no details of the financial transaction will be released publicly, the companies said.

Michael Bush, President & CEO of Ganeden told NutraIngredients that the company had previously known and worked with different divisions of Kerry for many years - adding that as two leaders in the industry Kerry and Ganeden 'are very well-matched organisations.'

"Both companies act as strategic partners to customers and deliver solutions that lead them to better taste and nutrition options for use in end-products, so a merger made sense strategically,"​ Bush told us. "Kerry’s global research, resources, development and applications infrastructure offer Ganeden many growth opportunities internationally, and the addition of Ganeden’s technologies to Kerry’s portfolio enables them to continue building immune and gut health platforms, and strengthens their position in the functional ingredients market."

"Our team is excited to be joining a well-respected, global organisation with the synergistic ingredients and resources to take Ganeden’s platform to the next level,"​ he added.

Integration

In late 2015 Kerry Group splashed out a cool $735m​ on three US-based companies to expand its taste and nutrition portfolio: Red Arrow Products, Island Oasis and Biothera Inc's Wellmune business.

Derived from the cell wall of a proprietary strain of baker’s yeast, evidence suggests that  Wellmune WGP ‘primes’ the innate immune system - the body’s first line of defence against invasion by bacteria and viruses – and can withstand wide pH ranges, high temperatures and harsh processing conditions.

Kerry said the acquisition of Ganeden, which recently launched an ‘inactivated probiotic’ based on its more clinically documented BC30 strain, will compliment the previous Wellmune buy-out.

Bush confirmed that Ganeden’s current portfolio of ingredients will now fall under the Kerry umbrella, and along with its previous acquisition of Wellmune will strengthen Kerry's nutrition and general wellness positioning.

"The companies will work together to ensure a smooth transition of Ganeden’s offerings into Kerry’s FI & A division,"​ he commented. "Ganeden experts will continue to act as leaders in the digestive and immune health space, but we hope to leverage Kerry’s reach and R&D capabilities with Ganeden’s probiotic technologies to continue global expansion, drive innovation, and pursue scientific advancements and ingredient expansion."

"The additional resources will also allow us to deliver functional benefits to food and beverage customers that would have otherwise been difficult for us to reach on our own,"​ he added. 

Speaking previously with NutraIngredients​, Dr David Keller, VP of scientific operations at Ganeden said it's inactivated probiotic ingredient, known as Staimune, is “a new functional ingredient for companies who are looking to add a functional or value-added proposition to a product where they can’t use a probiotic.”

Because the new ingredient is a full but inactive form of the BC30 strain it possesses the cell wall components that have been linked to immune benefits, but can be added to products where a live probiotic would be ‘inappropriate’ because cell death, germination or the production of lactic acid would prove a problem, he stated.

Capital markets update

Addressing investors, recently appointed CEO Scanlon​ said the Group expects to deliver in excess of 10% adjusted earnings per share growth on a constant currency basis on average per annum over the next five year cycle.

“This will be delivered through achievement of above industry-average volume growth and continued business margin expansion,”​ he said. “We expect to achieve 3% to 5% volume growth annually on a Group wide basis, with Taste & Nutrition targeting 4% to 6% growth and Consumer Foods targeting 2% to 3% growth.”

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