GSK buys sports drinks firm for £162m

City A.M. Reporter
PHARMACEUTICAL giant GlaxoSmithKline is to buy protein drinks company Maxinutrition for £162m from its private-equity owner, Darwin Private Equity.

Glaxo chief executive Andrew Witty said the deal, which is priced at 4.5 times last year’s sales, would complement its Lucozade sports drinks and Horlicks franchises.

It would give the drugmaker a broad range of nutritional drink products as it seeks to build up its consumer healthcare business, Witty said.

“It fits beautifully with the Lucozade business,” he told Reuters in an interview.

“If you think about GSK now, we have a carbohydrates nutrition business with Lucozade, we have a calcium micronutrients business which is Horlicks, and now we have a protein nutritional business.”

Glaxo will pay cash for Maxinutrition, including the repayment of outstanding debt.

UK-based Maxinutrition is Europe's leading sports nutrition company by market share, with a line-up of products that includes Maximuscle for weight-trainers, as well as Maxifuel and Maxitone.

It recorded sales of about £36m in the year to end-April 2010 and has delivered annual sales growth of approximately 21 per cent over the last three years.

Witty said the broad base in three different types of nutritional healthcare products could allow Glaxo to contemplate a range of innovations in future.

“You could then imagine a whole series of new products at all levels of the system – you could imagine elite sports products, you could imagine nutrition for the elderly, and you could also imagine daily nutritional supplements for people in Africa," he said.

The deal is subject to approval from Britain's Office of Fair Trading.