China’s By-Health Supplement Company Buys Penta-vite

June 5th, 2018 |

Author: admin

China’s nutrition brand By-Health announced recently that it would buy the assets of Penta-vite， the kid’s nutrition brand under Bayer，at the price of about 100 million yuan.

Penta-vite was founded in Australia in 1940, and was then under the international health brand Roche. In 2004, the brand was bought by Bayer, and focuses on producing nutrition products for kids who age between 0 to 12.

According to data by Euromonitor International, the market value of China’s nutrition product will exceed 10 billion yuan in 2018 with strong growth ahead.

Buying Penta-Vita is the most recent move by By-Health of internationalization, after it bought Life-space, part of its plan to improve the company’s business in the field of kid’s nutrition. (Source: people.com）

Back in January 2018, By-Health also purchased Australian probiotic company Life-Space Group for almost US$700 million.

Family-owned Life-Space, which sells probiotic health supplements through its Evolution Health business into China, finalised the deal with Shenzhen-listed By-Health on Wednesday. Melbourne-based Life-Space’s founding shareholders Alan and Irene Messer started looking for a buyer 12 months ago ahead of retiring.

The deal marks the latest acquisition by China of an Australian healthcare company as demand in the world’s fast-growing consumer market for vitamins, infant formula and supplements shows no sign of slowing down. China’s Health and Happiness bought Australian vitamins group Swisse for $1.7 billion in late 2015.

Life-Space managing director Ben McHarg said the company’s new owners planned to retain its Melbourne-based manufacturing operations and current management. Life-Space sells probiotics into China via e-commerce platforms such as Alibaba as well as the network of personal shoppers known as “daigou”.

By-Health sells products through a network of physical stores including more than 100,000 pharmacies in China.

“We will collaborate with them on expanding our sales in offline China and all other parts of the business they want us to run and manage.”

Life-Space’s revenues have jumped from around $14 million in 2005 to around $71 million last year.

Life-Space, which sells products through the Chemist Warehouse chain in Australia, was created six months ago to incorporate the sales and marketing arm Evolution Health and its Ultramix business. The company has about 130 staff in Australia.

Demand in China for vitamins, infant formula and supplements sourced in Australia has surged over the past five years. As a result, Chinese investment in Australia’s healthcare sector has jumped from zero to $5.5 billion in the past three years, according to KPMG.

The company sells dietary supplements, traditional herbal and sports nutrition supplements. It has been seeking to increase its portfolio of foreign brands in a market where many consumers still distrust Chinese products health supplements.

Life-Space said the deal had an enterprise value of $690 million but did not disclose further details of the acquisition. Mr McHarg said the new owners had plans to take the brand global.

The company joins a growing list of Australian exporters selling healthcare products into China despite the regulatory hurdles. The KPMG and The University of Sydney Business School report said there had been 16 completed takeovers or joint venture deals in the calendar years 2015 to 2017, with $2.55 billion invested in 2015, $1.35 billion in 2016 and $1.58 billion in 2017. (Source: afr.com)