GNC Holdings Inc, the leading global specialty retailer of health and wellness products, has acquired A1 Sports Limited (trading as Discount Supplements), a leading multi-brand sports nutrition e-commerce retailer in the UK. The acquisition was funded with cash on hand. Terms of the deal were not disclosed.
Following the acquisition, GNC.com, LuckyVitamin.com and discount-supplements.co.uk will continue to operate as separate businesses, each with its own product offerings and target customers.
Joe Fortunato, GNC’s Chairman, President & CEO, said, “Discount Supplements offers a broad selection of competitively priced proprietary and third party products, and is a leader in the UK’s sports nutrition market. This market – estimated to be ~£300 million – has demonstrated consistent double digit growth, which is forecasted to continue. The on-line channel has captured nearly one-third market share, and is growing faster than the market overall.”
He continued, “Entering the UK and other key European and Scandinavian markets are core elements of our strategic plan to expand GNC’s global reach. With this acquisition, we are well positioned to capitalize on the fastest growing channel in Europe’s top market. We also see the potential to leverage GNC’s marketing, product development and procurement capabilities to drive synergies.
“This includes having Discount Supplements introduce premium GNC sub-brands in the sports nutrition, vitamin and diet categories into the UK and other markets. We would like to welcome founder and Executive Chairman Stuart Harris along with key members of his management team who have agreed to participate in the continued growth of the business.”
Stuart Harris said, “We are excited to enter the next phase of our company’s growth. Combining GNC’s strengths in product development and marketing with our loyal customer base will allow Discount Supplements to further develop and expand the business.”
Discount Supplements – founded in 2004 – is expected to grow to approximately £20 million in revenue in 2013, and generate positive EBITDA margin. GNC expects the acquisition to be ‘earnings neutral in 2013, as the EBITDA contribution is offset by deal costs and amortization of intangibles.’
GNC Holdings Inc, headquartered in Pittsburgh, Pennsylvania, is a leading global specialty retailer of health and wellness products, including vitamins, minerals, and herbal supplement products, sports nutrition products and diet products, and trades on the New York Stock Exchange under the symbol ‘GNC’.
As at 30 June 2013, GNC had more than 8,300 locations, of which more than 6,200 retail stores were in the United States (including 969 franchise and 2,189 Rite Aid franchise store-within-a-store locations) plus franchise operations in 55 countries (including distribution centres where retail sales are made).
The company has a diversified, multi-channel business model and derives revenue from product sales through company-owned retail stores, domestic and international franchise activities, third party contract manufacturing, e-commerce and corporate partnerships.
www.gnc.com
www.discount-supplements.co.uk
