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Irish group’s acquisitions highlight attractions of the nutrition space
Thursday 09 Feb 2017 Author: James Crux

Global nutrition group Glanbia (GLB) has invested €181m in two highly complementary acquisitions (6 Feb). These deals highlight the strategic attractions of nutrition assets, as we outlined in our look at Science in Sport (SIS:AIM) – see Big News, 02 Feb 2017.

Kilkenny-headquartered Glanbia has enhanced the growth potential of its performance nutrition business through the takeover of California’s Amazing Grass, a natural plant-based nutrition products provider.

It has also snapped up Body & Fit, an online performance nutrition business selling mainly to Germany and the Benelux countries. Glanbia will flex its muscles in expanding Body & Fit’s sales across Europe. Both sport strong growth track records and combined will be ‘marginally earnings accretive in 2017’.

Given group turnover approaching €3.7bn, investors should probably be more aware of Glanbia. Also a major manufacturer of nutritional and functional ingredients, milk, butter and American-style cheddar cheese, Glanbia operates in the low risk food sector. It also has limited exposure to the UK and a strong US presence.

Irish brokerage Davy has an ‘outperform’ rating, arguing Glanbia is executing early in unlocking its balance sheet in a sensible manner to drive earnings with these deals. Analyst Jack Gorman will likely adjust his forecasts upwards following full year results later this month (22 Feb).

We like Glanbia at €15.81 for its growth potential in nutrition and resilient earnings profile. (JC)

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