Procter & Gamble (P&G) is acquiring supplements maker Thorne for $3.8 billion, Chief Executive Officer Shailesh Jejurikar told CNBC on Tuesday, as the consumer goods giant steps up its presence in the fast-growing health and wellness market. The statement led to the company's scrip rising by nearly 2% at the Wall Street.
Jejurikar said the acquisition price reflects Thorne's strong growth and is broadly in line with valuations seen across the industry.
“What I can say is the price is a good price for the growth rates they have. It's kind of in line with the industry benchmarks we've seen,” Jejurikar told CNBC.
P&G and Thorne had not immediately provided further details on the transaction.
Why P&G Is Buying Thorne?
The acquisition gives P&G a stronger foothold in the vitamins, minerals and supplements (VMS) market, as consumers increasingly spend on preventive health, wellness and self-care products.
P&G already has a presence in the supplements category through brands including New Chapter, Metamucil and Align Probiotic. Adding Thorne would expand its portfolio in a market that has attracted growing interest from major consumer goods companies.
The push also comes as demand for health and wellness products benefits from broader interest in healthier lifestyles and the popularity of weight-loss drugs.
Rachel Wolff, senior analyst at eMarketer, said the transaction is a sign of where consumer demand is currently strongest and could help P&G offset weaker performance in some other categories.
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Thorne Deal Gives L Catterton Big Return
Thorne, founded in 1984, was taken private by L Catterton, the LVMH-backed private equity firm, in a $680 million deal in 2023.
The $3.8 billion acquisition would therefore represent a substantial return for L Catterton in roughly three years.
Thorne had been publicly listed before the buyout. The company had forecast annual sales of around $290 million in 2023, while CNBC reported in April that its revenue was expected to reach approximately $650 million this year.
The company had also attracted interest from Haleon, a consumer health company, with sources telling Reuters in June that Thorne was the subject of a potential bid.
P&G Expands As Rivals Chase Wellness Growth
P&G's move comes as global consumer companies compete for a larger share of the rapidly evolving wellness market.
Unilever announced in April that it would acquire US-based nutritional supplements brand Grüns, while Nestlé is reviewing its VMS portfolio amid concerns over lower growth and margins.
The Thorne acquisition also comes shortly after P&G forecast slower annual sales growth, even as its beauty and wellness business delivered stronger performance.
P&G shares were up around 1.63%, trading at $147.29 apiece on the NYSE at 1:40 pm EST.
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