19 Dec Groupe Danone
With annual sales of more than €19 billion, Groupe Danone (“Danone”) is one of the fastest-growing food companies in the world. The group, whose products are sold on five continents, has more than 180 production plants and approximately 100,000 employees. With annual sales of more than €19 billion, Danone holds leading positions in healthy food through four businesses: Fresh Dairy Products, Baby Nutrition, Bottled Water, and Medical Nutrition.
Building on the strong relationship with Groupe Danone, Atlas Advisors has worked closely with the company on several acquisitions to strengthen its core franchise and streamline its product portfolio through the divestiture of non-core businesses.
In 2004, as the number two player in the biscuit market globally, Danone determined that expanding its presence in Latin America would improve its global market share. Atlas Advisors assisted Danone in the formation of a joint venture with Arcor S.A.I.C. (“Arcor”) in Argentina, Brazil and Chile, for the manufacturing and marketing of the companies’ biscuit, cereal bar and related products. The joint venture united Danone’s brand strength and marketing expertise with Arcor’s local distribution capabilities, allowing Danone to strengthen its position in the biscuit market in the region: upon completion, the joint venture held the number one position in Argentina, number two in Brazil and number three in Chile.
In 2005, following a strategic review of its water business in North America, Danone decided to exit the U.S. Home and Office Delivery sector due to challenging market conditions. Atlas Advisors advised on Danone’s divestiture of DS Waters, LP (“DS Waters”), its U.S. home and office bottled-water delivery business. Although DS Waters was challenged by difficult market and operating conditions, the transaction was successfully completed in November 2005, when the business was sold to a consortium formed by leading mid-market private equity company Kelso & Company and CF Capital.
As a subsequent step in the execution of the strategic review of the water business in 2006, Atlas Advisors advised Danone on the sale of Danone Waters of Canada, Inc. (“DWOC”), Danone’s Canadian home and office bottled-water delivery business. DWOC participated in multiple end-markets, with bottles sold to homes, to offices and at retail. Each of the company’s end-markets were experiencing different industry trends, making the company’s business merits complex. Despite such complexity, Atlas Advisors crafted and communicated a clear investment thesis and created maximum competition for the business, which was sold to Birch Hill Equity Partners, one of Canada’s premier mid-market private equity firms.
In 2008, as part of its strategy Danone decided to focus on its blockbuster yogurt brands in the U.S. Activia and Light & Fit, Danone divested the Frusion and La Crème drinkable yogurt brands, as they were identified as non-core. Atlas Advisors advised Danone on the sale of Frusion and La Crème to Grupo LALA from Mexico. Frusion and La Crème form the core of Grupo LALA, which was motivated to purchase the brands in an effort to develop a U.S. yogurt platform and the basis for its expansion.
Continuing the execution of its strategic decision to exit the Water business, Atlas Advisors initiated the divestiture of Naya Waters (“Naya”) in 2009. As advisors to Danone, Atlas Advisors positioned Naya as a leading bottled water company in Canada, specializing in natural spring water and spring water–based drinks with a focus on environmental sustainability, and focused buyers on two key elements of the company’s future value: (i) its credible positioning as the most environmentally friendly bottled-water company in North America; and (ii) its ability to re-enter the U.S. market with a differentiated, on-trend product offering. Naya was sold to Catterton Partners, a leading private equity firm providing equity capital to growing middle-market consumer companies in North America.
In 2010, Atlas Advisors advised Danone on the acquisition of Medical Nutrition USA (“MDNU”). MDNU introduced liquid protein supplement products for the elderly in the U.S. long-term care market in 2003. The acquisition of NASDAQ-traded MDNU reinforced Danone’s leadership in advanced medical nutrition and allowed Danone to introduce its products into the highly attractive U.S. long-term care channel. The combination of MDNU and Danone brought together Danone’s global reach and research in pediatric medical nutrition with MDNU’s product leadership in nutrition medicine for the elderly in the U.S., creating the opportunity for significant, new product development and synergies.
In 2012, Atlas Advisors advised Danone on the acquisition of Applied Nutrition Corporation (“Applied Nutrition”). Applied Nutrition is a leading U.S. manufacturer and marketer of specialty nutritional supplement products for individuals suffering from chronic metabolic disorders, in particular phenylketonuria. This acquisition, together with the 2010 acquisition of MDNU, represents an additional step in the execution of Danone’s publicly stated strategic goal of expanding its business and product portfolio in the high-growth global nutrition market. The transaction provides another example of Atlas assisting its clients in sourcing, evaluating, and negotiating a successful transaction that is an integral part of delivering Danone’s global growth strategy.