Nellson Neutraceutical by Fremont Partners –

Fremont Partners’ purchase of Nellson Nutraceutical gives the private equity firm an edge in the energy and nutrition food sector. Fremont purchased the food maker for approximately $300 million slightly over six times EBITDA.

Nellson formulates and manufactures nutrition bars and powders used to serve specific purposes such as energy/sports nutrition, bodybuilding, diet/weight loss and wellness/clinical.

Nellson has a 40% market share in the specific sector they operate in, and over 80% of the company’s revenues derive from long-term contracts. Sales have increased for Nellson since 1998, with EBITDA also showing a rapid ascent during the same time period. With baby boomers and the z’ generation (ages 15 to 24) showing increases in annual population growth (they are the biggest users of these products), coupled with a 10% increase in overweight Americans, Fremont – by way of the Nellson purchase – may be in the right place at the right time.

To gain the right to purchase Nellson, Fremont had to contend with at least four other billion-dollar-plus funds, but the buyout shop has a sizable fund of its own – Fremont Partners III, a $920 million fund. This is a significant increase over Fremont Partners II, a $605 million fund raised in 1996.