Transaction

• Nutri-Health is a nutritional supplement manufacturer with expertise in probiotic formulas, which markets and sells direct to consumers through direct mail campaigns.
• Atrium Innovations (TSX:ATB) is a Canadian-based public company engaged in manufacturing and selling of nutritional products through physician channels, that desired a direct to consumer channel
• Atrium Innovations made an unsolicited acquisition proposal for Nutri-Health at a valuation level of 5.0x EBITDA.

Challenges

• Maximizing valuation and terms from an unsolicited bidder
• During a historically difficult economic environment within the financial markets (2008)
• Cross border transaction with a publicly traded buyer added a layer of complexity
• Seller desired to execute a transaction before the 2008 year end leaving a 3 months window to close the sale

Solution

• CWC prepared to launch a full marketing  process to provide other options as well as create competitive pressure in order to maximize value from Atrium
• CWC was able negotiate the 5.0x multiple to 7.0x which included 5.6x cash at close and 1.4x in uncapped earnouts
• CWC negotiated approximately $500,000 of EBTIDA “addbacks”, for which Nutri-Health received an additional $2.8 million cash at close
• Closed a very attractive transaction with Atrium before year end