Danone has entered into an agreement to acquire Functional Formularies, a US natural food tube feeding company.
The France-based dairy giant acquired the Ohio-based company from private equity firm Swander Pace Capital for an undisclosed fee.
The move expands Danone’s medical nutrition portfolio, developing products for people with special medical needs and adding a tube feeding range.
Jürgen Esser, Danone’s Deputy Chief Executive Officer and Chief Financial Officer (CFO), said: “With the addition of a significantly differentiated product portfolio of functional formulas that complement our existing Real Food Blends brand portfolio, we are even better positioned to support your nutritional needs. I’m sure of tube feeding families and patients. ”
Danone’s medical nutrition business is part of its broader “specialty nutrition” division, which also includes infant products such as baby food and formula. According to the company, medical nutritional products account for about 40% of the division’s sales.
“We are extremely proud of our team’s ability to deliver high-quality ingredients that help improve patient outcomes,” said Marc Gibeley, CEO of Functional Formularies.
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“This has been a very rewarding journey and we have been delighted to partner with the SPC team. Their strategic perspective, networks and broader category insights have been key to the team’s success and are greatly appreciated.”
In Danone’s full-year 2023 results, the specialty nutrition division generated €8.5 billion ($9.1 billion), an increase of 3.3% compared to 2022. The division reported recurring operating profit of 1.77 billion euros, down from 1.8 billion euros a year earlier.
In the first quarter of this year, the Specialty Nutrition division’s net sales amounted to €2.18 billion, an increase of 1.9% year-on-year.
Last September, Danone announced a €50 million investment in its medical nutrition sector to expand its factory in Poland and add a production line to its plant in Opole.
The following month, the owner of Activia Yogurt invested 15 million euros ($15.8 million) in the expansion of its medical nutrition products factory in Turkey. Shortly thereafter, the company expanded its product line in China for adults with special medical needs, adding the Fortimel brand to its local portfolio.
