Columbia West Capital - Transaction Case Study
Atrium Innovations Inc. Acquisition of Nutri-Health Supplements

 

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