One of Canada’s best-known vitamin brands is preparing to change hands in a deal that shows how valuable the global health and wellness market has become.
Japan’s Kirin Holdings agreed this month to acquire Toronto-based Jamieson Wellness in a transaction valued at approximately $2.5 billion, including debt. Kirin is offering shareholders $45.75 per share in cash, a 27% premium to Jamieson’s 20-day average share price before reports of a potential transaction emerged in June.
For Canadians who associate Kirin primarily with beer, the acquisition may seem like an unusual combination. The Japanese company has spent years expanding beyond beverages, however, and has identified health science as an important part of its long-term growth strategy.
Jamieson gives Kirin an established platform in North America.
Founded more than a century ago, Jamieson sells vitamins, minerals and supplements in Canada and international markets. The company’s familiar green bottles have given it a level of brand recognition that would be difficult and expensive for a foreign company to build from scratch.
Kirin has said the acquisition will help expand its health science business in North America. Jamieson, meanwhile, gains access to the resources of a much larger international company as it seeks additional growth outside Canada.
The deal also reflects changing consumer spending. Vitamins and supplements have moved further into the mainstream as consumers pay greater attention to nutrition, preventative health and general wellness. That has created opportunities for companies selling everything from traditional multivitamins to specialized supplements.
For investors, Jamieson’s sale demonstrates the value international buyers can place on established Canadian consumer brands. Kirin is not simply buying manufacturing capacity. It is acquiring a name with customer recognition, shelf space and existing relationships with retailers.
There are still steps before the transaction is complete. Jamieson’s board has unanimously recommended the agreement, but shareholders must approve it and the deal remains subject to regulatory and other customary conditions.
If completed, the acquisition would also remove another recognizable company from the TSX. That can be bittersweet for Canadian investors. A takeover premium provides an immediate benefit to shareholders, but the market loses an independent Canadian public company if the buyer ultimately takes it private.
For Jamieson, the transaction is a reminder that a century-old Canadian brand can have significant value far beyond its home market.
For Kirin, the $2.5 billion price tag represents a sizeable bet that health and wellness can become a much larger part of its global business.
