Nutritional supplement leader Garden of Life acquired by Atrium Innovations

Sep 21 2009

Atrium Innovations Inc. (TSX: ATB), a leading developer, manufacturer, and marketer of science-based and professionally supported products for the health and nutrition industry, announced today the purchase of Garden of Life, Inc., a leading formulator, distributor and marketer of nutritional supplement products.

Garden of Life products are sold in nearly 12,000 U.S. health food and specialty retail outlets, including major chains as well as in thousands of independent stores. The company is widely recognized throughout the fast-growing U.S. and Canadian nutritional supplement industries as a leader in innovation, efficacious and science-based products. With annualized revenues of approximately US$52 million, the company's premium high-quality products and loyal customer following have established Garden of Life as a leader in the U.S. nutritional supplements industry.

"By joining forces with Garden of Life, we strengthen Atrium's footprint in the health and nutrition industry and rapidly expand our participation in a growing market segment," stated Pierre Fitzgibbon, Atrium's President and CEO. "This new distribution channel complements our strength in the health care professional segment. Together with our Direct to Consumer business, Atrium is well-positioned to respectively offer to each of these channels a portfolio of quality, science-based products that are specifically designed to meet our customers' needs."

Under the terms of the transaction, Atrium will pay Garden of Life an initial consideration of US$35 million, US$32.5 million in cash, of which US$12 million is coming from the working capital, and US$2.5 million in the form of newly issued common shares in Atrium. Moreover, Atrium will assume a bank debt of US$2.5 million. An adjustment payment will be made at the end of fiscal year 2009. The initial purchase price is based upon a 6.5 multiple of the actual 2009 earnings before interest, taxes, depreciation and amortization ("EBITDA"). Earn-out payments have also been structured and will be based upon a percentage of incremental EBITDA in 2010 and 2011 above a minimum growth level. Manufacturing synergies will be ascribed to Atrium as they are not part of the earn-out payments and this transaction is immediately accretive.