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Permira stands to make 4.3x its money on Atrium

  • $2.3 bln deal marks first full exit out of Permira Fund V
  • Permira bought 75 pct stake in Atrium in Nov. 2013
  • Vitamin maker’s brands include Garden of Life, Pure, Douglas, Seroyal Wobenzym

Permira’s sale of a majority stake in Montreal vitamins maker Atrium Innovations is poised to produce an about 4.3x return for the European buyout firm, a source familiar with the matter said.

The buyer is consumer giant Nestle, which has agreed to pay $2.3 billion cash for the nutritional company, best known for its Garden of Life supplements. Nestle is buying Atrium through its healthcare nutrition unit, Nestle Health Science.

The deal marks the first full exit for Permira out of Permira V, which closed at its hard cap of 5.3 billion euros ($7.2 billion) in 2014.

Permira’s majority investment in Atrium dates to November 2013. The PE group led a consortium that took Atrium private for $24 a share cash, or a total enterprise value of $1.1 billion.

Permira at the time took a 75 percent stake in Atrium, while Fonds de solidarite FTQ and Caisse de dépôt et placement du Québec each took a 12.5 percent interest.

Atrium develops and produces science-based natural health products, with a distribution network that reaches more than 50 countries. Besides Garden of Life, its North American portfolio encompasses the Pure Encapsulations, Douglas Laboratories and Seroyal brands, among others. Its European business in based in Germany under the Wobenzym banner.

Atrium is projecting about $700 million in sales for 2017, Nestle said.

Peter Luther, Atrium’s president and CEO, will continue to head up the business. Atrium will operate as an independent division under Nestle Health Science.

In other recent exits, Permira in August sold Netafim in a deal that valued the irrigation technology company at almost $1.9 billion. The European buyout firm stood to make 2.5x its investment with the sale, Buyouts reported at the time.

Permira Partner John Coyle led the Atrium investment for the firm.

Morgan Stanley, RBC Capital Markets and the William Hood & Co division of AXIA Capital provided financial advice to Atrium. Skadden, Arps, Slate, Meagher & Flom and Stikeman Elliott offered legal counsel to the sellers.

Action Item: Permira’s portfolio: www.permira.com/portfolio/

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