Will reinforce Atrium's leadership in the North American HCP market and
provide critical scale to Canadian operations
QUEBEC CITY, Jan. 4 /CNW Telbec/ - Atrium Innovations Inc. (TSX: ATB), a recognized leading developer, manufacturer and marketer
of professionally endorsed, science-based dietary supplements for the
health and nutrition industry, today announced the purchase of
Ontario-based Seroyal International, which commercializes premium
dietary supplement brands targeting primarily the healthcare
practitioner (HCP) channels in Canada and in the U.S. with annualized
consolidated revenues of approximately US$40 million. The transaction
closed on December 31, 2010.
Seroyal's product portfolio consists of three main brands: Genestra,
Unda and Pharmax. These brands are well known among HCP channels and
account for close to 90% of total revenues with Genestra being the core
of these HCP brands. Another brand, CoreLab, owned in a joint venture,
is a Health Food Store brand currently sold in the U.S. In addition,
the company is the exclusive distributor for the Canadian and U.S.
markets of Unda, a European homeopathic brand. Revenues derived from
the Canadian and U.S. markets account respectively for approximately
65% and 35% of total sales. This acquisition will add quality branded
products to complement Atrium's family of products.
Seroyal is well known and recognized for its extensive Continuing
Education Program via seminars and teleconferences that are supported
by internationally recognized practitioners and educators. The
Continuing Education Program is a powerful tool to establish industry
credibility among HCPs and is at the centre of marketing initiatives.
"Seroyal is one of the largest acquisitions in our short history. It
will allow Atrium to surpass the important milestone of US$100 million
in EBITDA. Moreover, it will provide us with a leading position in the
North American HCP channel and create a significant presence in Canada
when combined with our existing operations," said Pierre Fitzgibbon,
President and CEO of Atrium.
"This acquisition adds premium, high margin and complementary brands to
Atrium's family of products. Within our multi-channel strategy, we
envision some cross-selling opportunities with these new brands and
some operating synergies.
"As an organization, we strongly believe in the leadership role we need
to take in the education process for the better understanding of our
industry given our science-based approach. From that perspective,
Seroyal's extensive Continuing Education Program with HCPs is a perfect
fit. Our intention is to leverage its programs for the benefit of all
our customers and brands.
"Seroyal's management team has done an excellent job at growing Seroyal
and in creating multi-business opportunities by way of product and
market development initiatives for the upcoming years. It provides us
with a powerful platform for future growth.
"We are also very pleased with our association with Dr. Nigel Plummer, a
high profile and key speaker in many industry seminars and our joint
venture partner for the distribution of our CoreLab brand. Dr. Plummer
has an exceptional worldwide reputation in clinical research and
nutraceutical development, particularly in the pro- and prebiotic
categories," concluded Mr. Fitzgibbon.
For the past twelve months, Seroyal reported consolidated revenues of
approximately US$40 million. Under the terms of the acquisition, Atrium
acquired Seroyal for a total cash consideration of US$110 million and
the transaction is subject to no future earn-out payments. The total
acquisition price implies a LTM EBITDA ratio of 7.5 times. This
acquisition combined with the recently announced acquisition of Minami
will be immediately accretive by US$0.22 per share on an annualized
basis. These acquisitions were financed with available cash and bank
"Taking into account this acquisition and the recent acquisition of
Minami Nutrition, the net debt to pro forma EBITDA ratio stands at 2.6
times, a leverage level we are very comfortable with and in our target
range," said Mario Paradis, Vice President and Chief Financial Officer.
"Considering the low capital expenditures and working capital
requirement of our businesses, we have the option of dedicating a large
portion of cash flow to debt reduction. Alternatively, depending on
circumstances, we may dedicate it to other opportunities to enhance
Financial Guidance (Amounts are in US dollars)
Atrium is providing the following financial guidance: The Q4 2010
revenues, EBITDA and EPS will be slightly lower than those of Q4 2009
primarily due to unfavourable currency exchange rates. For the 2011
financial year, the revenues are expected to be between $424
million-$432 million, the EBITDA between $105 million-$110 million, the
fully diluted EPS between $1.87-$1.96 and the cash flow before working
capital between $70 million-$75 million.
Atrium Innovations Inc. is a globally recognized leader in the
innovation, formulation, production and commercialization of
science-based and professionally endorsed dietary supplements for the
health & nutrition industry. The Company focuses primarily on growing
segments of the health and nutrition markets that are benefiting from
the trends towards healthy living and the ageing of the population.
Atrium markets a broad portfolio of finished products through its
highly specialized sales and marketing network in more than 35
countries, primarily in North America and Europe. Atrium has
approximately 1,000 employees and operates seven manufacturing
facilities. Additional information about Atrium is available on its
website at www.atrium-innovations.com.
About Seroyal International
Seroyal is based in Toronto and was founded in 1984. The company sells
three branded families of products (i.e. Genestra, Pharmax and CoreLab)
and has distributed the Unda European homeopathic brand, since 1990.
Seroyal has a complete portfolio of branded products that target
healthcare practitioners such as naturopaths, nutritionists,
chiropractors, medical doctors and acupuncturists. The Company has over
70 employees in Canada and the U.S. Additional information about
Seroyal is available on its website at www.seroyal.com.
Conference Call and Webcast
Atrium will hold a conference call and webcast at 11:00 a.m. Eastern
time on January 4, 2011. Participants may access the conference call by
using the following numbers: (514) 807-9895, (888) 231-8191 or (647)
427-7450. A live webcast is also available via the Company's website at
www.atrium-innovations.com in the News Center section. A replay of the webcast will also be available on our website www.atrium-innovations.com for a period of 30 days.
Cautionary Note and Forward-Looking Statements
This press release contains certain forward-looking statements with
respect to the Company. These forward-looking statements, by their
nature, necessarily involve risks and uncertainties that could cause
actual results to differ materially from those contemplated by these
forward-looking statements. The Company considers the assumptions on
which these forward-looking statements are based to be reasonable, but
cautions the reader that these assumptions regarding future events,
many of which are beyond its control, may ultimately prove to be
incorrect since they are subject to risks and uncertainties that affect
the Company. For additional information with respect to these and other
factors, see the Company's quarterly and annual filings with the
Canadian securities commissions. The Company disclaims any intention or
obligation to update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise, other than
as required by law.
SOURCE ATRIUM INNOVATIONS INC.
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