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The Isopure Company, LLC

Company Background:
IsopureFounded in 1984 and based in Hauppauge, NY, The Isopure Company (the "Company" or "Isopure") provides consumers with the highest quality, protein-based Sports Nutrition products. The Company's flagship offering is the premium positioned Isopure brand (the "Brand") of whey protein isolate products. The Brand was launched in 1998 and is available in both powder and ready-to-drink ("RTD") forms. Isopure is broadly distributed through specialty chains, such as GNC and The Vitamin Shoppe, online via Amazon.com and Bodybuilding.com, gyms, and in over 30 countries.
 

 
EncoreIn 2007, after guiding Isopure through 10 consecutive years of growth, founder Hal Katz partnered with Encore Consumer Capital ("Encore"), a leading consumer-focused private equity fund, to provide the capital and strategic resources for a new phase of accelerated growth. The partnership proved highly successful: by 2014, Isopure had established a leadership position in the Sports Nutrition category with sales reaching $74.6 million, representing a growth rate of approximately 20% per annum over the last several years.
 
Isopure was an important investment for Encore, and our bar for choosing an advisor was very high. Sawaya Segalas distinguished themselves from the outset with a deep understanding of industry dynamics and key drivers of value for the Isopure brand, as well as decision-maker relationships with both strategic and private equity buyers. They exceeded our expectations on all fronts. Most of all, we were singularly impressed with their incredible ability to leverage this knowledge to drive the execution in a way that was both disciplined and nimble, and ultimately maximized value for Encore and our fellow shareholders.
ROBERT BROWN
CO-FOUNDER AND MANAGING DIRECTOR, ENCORE CONSUMER CAPITAL
 

The Isopure Brand & Proposition:
Isopure was launched in 1998 by Hal Katz and Ernie Geraci — two guys with a cement mixer and a Chevy van. Avid health and fitness enthusiasts, they believed that the Sports Nutrition market did not offer a protein product with the nutritional profile many athletes sought. They were convinced they could deliver a premium product with a superior nutritional profile differentiated by its quality, purity, and taste.
 
Whey
 
After years of experimentation with a number of sports nutrition and meal replacement powders and shakes of various nutritional profiles and forms, Hal and Ernie keyed in on what became their critical business insight, and claim to fame: Isopure, a 100% pure protein product, containing nothing but the highest quality whey protein isolate with no carbohydrates and essentially no fat and no lactose. They turned to their own consumer research "laboratory": a stable of professional athletes and trainers with whom they had long-standing relationships. These customers validated their own thinking: the product mixed readily in water, left no chalky after-taste and did not cause bloating and discomfort associated with lactose intolerance. It was at that point they realized that they had a winner on their hands.
 
Isopure is the first and remains the only whey protein product to boast 50 grams of protein per serving, delivering more protein, in its purest form, with no impurities, additives or fillers. This highly differentiated product proposition of "Purity and Protein" was embraced by athletes and mainstream users alike, and is the cornerstone of Isopure's success today. It is also an essential component of Isopure's aspirational positioning as a "lifestyle" brand that has appeal to a far broader demographic than most of its competitors. The Company's clean packaging, easy-to-understand ingredient decks, and clear articulation of product benefits, reinforce the Brand's standing in what is otherwise a cluttered, often sensationalistic market.
 
Less is More
 
The Company's marketing is targeted toward both enthusiasts and mainstream consumers. The "WE'RE ALL MORE THAN MUSCLE" campaign resonates across a wide spectrum of consumers, and has been the focal point of the Brand's print and digital messaging.

More than Muscle
 
Transaction Objectives & Objectives:
Sports Nutrition has been one of the most exciting categories in consumer health. Over the 10-year period ending in 2013, the category grew over 10% per year, and now accounts for $9 billion in global retail sales. In the U.S., the consumer base tripled to 44 million in 2011 from just 15 million in 2001, establishing a bona fide category of scale. At the same time, the category's rapid growth rate relative to adjacent sub-sectors of Consumer Health contributed to an accelerated pace of M&A activity as both strategic and private equity players sought to capitalize on the category's prevailing tailwinds and outlook for continued growth.
 
Sports Nutrition Industry
 
From 2010 to 2013, Isopure's growth accelerated at a 3-year CAGR of more than 20%, over 2x the category's growth. In an effort to sustain and broaden the base of this growth, the Company recruited Chris Hickey to join as CEO in 2013. Mr. Hickey's experience in and around the Sports Nutrition category, Chris Hickeymost notably at Abbott Nutrition where he lead the repositioning of EAS and its successful migration to the Food Drug and Mass channels, made him an ideal candidate to work alongside Ernie Geraci, Isopure's long-time EVP & COO.
 
By the end of 2013, Encore and its fellow shareholders decided to evaluate a sale of the Company. Their primary transaction objectives were to:
  • Take advantage of a highly educated buyer universe and strong capital markets conditions in 2014;
  • Maximize shareholder value through a competitive auction;
  • Approach only a targeted number of the most qualified buyers;
  • Optimize transaction speed and certainty by providing a comprehensive data room and facilitating multiple opportunities for management interaction; and
  • Minimize distraction to Isopure's Management.
     
Sawaya Segalas was engaged by Isopure as its exclusive financial advisor. Sawaya Segalas' credentials for each one of these transaction objectives were second to none. As one of the leading consumer M&A advisors with deep experience across all the relevant consumer verticals, including Consumer Health, and Food and Beverage, the Sawaya team brought a deep understanding of the industry dynamics and unparalleled access to key decision-makers.
 
Sawaya Segalas' performance was exceptional throughout the sale process. They approached every detail — from helping us craft a compelling brand story to custom tailoring the message to prospective buyers — with creativity and thoughtfulness. They applied the highest standards of excellence and integrity to everything they did on our behalf, and I knew the management team could always rely on them for keen insight and to have Isopure's best interests at heart as a result.
CHRIS HICKEY
PRESIDENT & CEO, THE ISOPURE COMPANY, LLC
 

Process Outcome & Transaction Highlights:
  • Sawaya Segalas orchestrated a disciplined and highly competitive process that attracted considerable interest from high quality strategic and financial buyers
  • On September 10, 2014, Glanbia announced that it had entered into an agreement to acquire The Isopure Company, LLC subject only to customary regulatory approvals for a consideration of $153 million
  • The purchase consideration of $153 million represents a 2.1x multiple of LTM Net Sales of $74.6 million
  • On October 14, 2014, the transaction closed successfully after receiving regulatory approval
  • The transaction also represented a compelling opportunity for Glanbia to build shareholder value by continuing to strengthen the leadership position of its Global Performance Nutrition ("GPN") group:
     
As a premium brand, the business is an excellent addition to our portfolio of market leading performance nutrition brands and provides an opportunity to leverage our infrastructure and capabilities to drive future growth. The transaction, which is firmly aligned with the group's strategy, supports our growth ambitions and will be value enhancing for our shareholders.
SIOBHAN TALBOT
GROUP MANAGING DIRECTOR, GLANBIA PLC1
 
     
  • Encore and its fellow shareholders successfully realized a superior return on investment in the sale
  • The orchestration and results of this transaction were viewed by Isopure's founder and management, Encore, and Glanbia as a win-win-win outcome

1 Glanbia plc press release (Sept. 10, 2014)
 
Client
Isopure
Brand
Isopure
Owner/Parent
Encore Consumer Capital
Counterparty
Glanbia plc
Segment
Food & Beverage
Transaction Value
$153 million
Closing Date
October 14, 2014
Role
Exclusive Financial Advisor
 
 
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