P&G seals $3.8bn deal for supplements company Thorne
Consumer goods group expands its health business in a sector that has boomed since Covid pandemic
Procter & Gamble has agreed a $3.8bn deal to acquire supplements maker Thorne, delivering an outsized return for private equity group L Catterton less than three years after it bought the company.
P&G, whose stable of brands includes Gillette, Ariel and Pampers, saw off competition from rivals to buy Thorne in a deal that underscores its ambitions to expand its health business.
The supplements industry has boomed since the Covid-19 pandemic as consumers have become increasingly interested in their health and wellbeing. The cash deal is set to close in the fourth quarter of this year.
“Consumer interest in self-care, prevention, wellness and personalised health continues to grow, and Thorne strengthens our position in premium wellness,” said Paul Gama, P&G’s chief executive of healthcare.
Thorne, which sells supplements such as magnesium and omega-3, was on track to reach $650mn of revenues this year. The FT reported in June that Unilever was also interested in buying the South Carolina-based business.
The deal marks a bumper return for L Catterton, which originally acquired Thorne in a take-private deal for $680mn in 2023. LVMH-backed L Catterton has invested in a range of consumer brands such as the footwear group Birkenstock and Dishoom, the Indian restaurant chain.
Thorne listed on the Nasdaq in 2021 at $10 per share, marginally below the level at which it was taken private. The group has built its brand by partnering with athletes and sports associations, including Major League Rugby in North America.
L Catterton said it had accelerated Thorne’s growth including by bringing on new leadership, expanding its marketing and investing in research and development.
“Our investment in Thorne reflects what L Catterton does best: identifying enduring shifts in consumer behaviour and partnering with category-leading brands to help them realise their full potential,” said Marc Magliacano, a managing partner.
The Thorne acquisition adds to P&G’s portfolio, which has grown through a series of bolt-on acquisitions, including its $4.2bn deal to buy Merck KGaA’s consumer health unit.
Lately, P&G has focused more on wellness brands in an effort to attract younger consumers. It struck a deal this year to buy digestive health brand Wonderbelly, also backed by L Catterton, for an undisclosed price. P&G also owns New Chapter vitamins.
P&G has faced pressure from surging commodity prices and weaker consumer sentiment, and failed to increase sales volumes in the most recently ended fiscal year. Last year it embarked on a drive to cut 7,000 non-manufacturing jobs.
“Procter & Gamble’s acquisition of supplements maker Thorne is a clear indicator of where consumer demand is currently strongest,” said Rachel Wolff, senior analyst at eMarketer.
“Acquiring Thorne would give P&G a larger foothold in the health and wellness space, as well as offset some of the softness the company is experiencing in other categories.”
P&G shares rose 1.86 per cent to $147.67 on Tuesday.