Sales quadrupled in the past seven years
BENICIA — CytoSport, maker of Muscle Milk sports-nutrition products, said to be one of the nation’s largest such brands, on Monday said it is set to be acquired by Hormel Foods Corp. (NYSE: HRL).
The sale would give Hormel a platform of protein and sports nutrition powders, shakes and bars with extensive domestic and international reach. The deal is scheduled to close in 30 days, pending customary and regulatory conditions. A price for the transaction wasn’t disclosed.
CytoSport’s brands align with Austin, Minn.-based Hormel’s focus on protein while further diversifying its portfolio and broadening the appeal to younger consumers, according to the joint announcement. The acquisition by the S&P 500 member also would boost CytoSport’s resources for innovation, consumer experience, marketing, sales, retailer relationships and distribution on a multinational scale, the companies said.
“We are excited for the future of the company and are fully confident that aligning our team’s knowledge and experience in the sports nutrition world with the incredibly robust global strategies of Hormel Foods will help the company establish an even stronger portfolio of brands and products,” said CytoSport Chairman and founder Greg Pickett. “Over the last 15 years, we’ve developed one of the strongest brands in the industry and built an entirely new protein beverage category with Muscle Milk. This next step in the company’s growth story will enable CytoSport to continue its leadership role in the industry and be a part of a global company with greater resources.”
Mr. Pickett and his son Mike Pickett started the company in 1998 and have operated it since, even with an equity investment by TSG Consumer Partners several years ago. The Pickett family will remain committed to the company’s growth and will continue to be involved in day-to-day operations, according to the announcement.
“We view this new opportunity as a tremendous way to expand the CytoSport brand presence on the global scale and align with a company that shares our commitment to employees and consumers,” said Mike Pickett in a statement. “With the support from a multinational company like Hormel Foods, the entire CytoSport team is confident in the direction of the brands and look forward to continuing to share the brands’ experiences with consumers around the country and the world.”
TSG Consumer Partners, an investment firm with more than $2.9 billion under management, would sell its stake in CytoSport in this deal.
“We are fortunate to have partnered with the Pickett family and the management team to help drive the company’s success over the last seven years,” said Brian Krumrei, managing director at TSG Consumer Partners. “During this period, Muscle Milk has established a leading position in the protein beverage category and sales have more than quadrupled.”
CytoSport (888-298-6629, cytosport.com) operates its NSF International GMP for Sport-registered facility at 4795 Industrial Way in Benicia. The company was named 2009 Small Company of the Year at the annual Beverage Forum presented by Beverage Magazine and Beverage Marketing Corporation and on the Forbes list last year of the 25 most innovative companies, based on its ready-to-drink preparation of the Muscle Milk powder, launched in 2004. Fast Company this year listed CytoSport as one of the world’s top 10 most innovative companies in fitness.
Credit Suisse is CytoSport’s financial adviser in this deal. Dean Bradley Osborne Partners is representing the Pickett family.
Copyright © 1988–2014 North Bay Business Journal
View the policy for linking to website content.