Irish food group Glanbia said on Monday it would spend $315 million to buy Optimum Nutrition, Inc, a US maker of supplements for body builders, which will use by-products of its cheese manufacturing. Privately owned Optimum makes protein powders, drinks and sports bars based on whey, which emerges as a secondary product in Glanbia's cheese plants.
"The transaction is expected to be earnings enhancing from this year," Glanbia Group Managing Director John Moloney said in a statement. Shares in Glanbia, which makes cheddar in the United States and ranks itself as Europe's biggest supplier of mozzarella cheese for pizzas, traded 5.8 percent higher by 0758 GMT at 4.6 euros. The wider Irish market was up 0.7 percent.
Analysts agreed there was scope for synergies with the acquisition. "Glanbia had nutrition science and technology; route to market and customer lists were its deficit. But this deficit has been progressively eliminated through acquisitions," Davy analyst John O'Reilly said.
"It now has routes to all market segments ... and strong customer lists," O'Reilly said in a research note. Glanbia's Moloney told Reuters it was interested in further acquisitions in the sector.
"Our first goal will be to consolidate and integrate the business," Moloney said in a telephone interview. Illinois-based Optimum, which Glanbia is buying on a debt-free basis, employs 387 people in Illinois, South Carolina and Florida and had revenue of $185 million in 2007, Glanbia said.