The world’s biggest food company is acquiring Westmount, Quebec-based Atrium from an investor group led by Permira Funds, Nestle said in a statement Tuesday. The Swiss owner of Nespresso and Lean Cuisine is paying cash for the Garden of Life supplement maker, whose 2017 sales are expected to approach $700 million.
chneider is trying to turn around the Vevey, Switzerland-based company by focusing on niche acquisitions in areas like healthy eating, hipster coffee, infant nutrition and pet care. The new CEO, who joined Nestle from German health-care company Fresenius SE, is under pressure to revamp the food giant after the weakest nine-month sales since the turn of the century.
The Atrium deal, which includes the assumption of an undisclosed amount of debt, is Nestle’s biggest acquisition in medical nutrition since the company accelerated its push into health in 2006 by spending about $2.5 billion on businesses from Novartis AG that made food for hospital patients.
“This is a good start,” said Jon Cox, an analyst at Kepler Cheuvreux in Zurich. “Nestle still has firepower to do all other deals it has been linked with. But I wouldn’t be surprised to see more under-the-radar stuff rather than the big bang.”
The deal, expected to close in the first quarter, will add to earnings growth immediately, Nestle Health Science CEO Greg Behar said in a call with journalists. He added that the valuation of the deal is lower than what most assets in the consumer over-the-counter industry are going for.
“It’s a good size and digestible,” he said, adding that 80 percent of Atrium’s sales come from the U.S. Nestle plans to boost distribution in the U.S. and expand Atrium abroad, he added.
“We continue to be open, but I’m not going to comment on the other stuff that’s out there,” Behar said.
Nestle has been investing heavily in its health-science unit since 2011, trying to develop food-related products to prevent ailments such as obesity, metabolic problems and Alzheimer’s disease. Behar said in 2015 that Nestle Health Science could eventually achieve sales of 10 billion Swiss francs ($10.1 billion).
Atrium, founded in 1999, will add probiotics, plant-based protein nutrition, meal replacements and multivitamins to the Swiss company’s portfolio. The Canadian company, which has 1,400 employees, sells its supplements in health-food stores in the U.S. and selected other markets. Its brands include Wobenzym, Douglas Laboratories, Genestra Brands, Orthica, AOV, Minami, Klean Athlete, Pharmax and Trophic.
The deal for Atrium follows the Swiss company’s purchase of vegetarian-burrito maker Sweet Earth and Blue Bottle Coffee in September, after a June investment in meal-delivery startup Freshly. Activist investor Dan Loeb, who disclosed a stake in Nestle earlier this year, has said the maker of Cailler chocolate and Maggi seasonings fell behind competitors in adapting to a lower-growth environment amid changing consumer habits.
Permira bought 75 percent of Atrium in 2014 in a deal that valued the entire company, including debt, at about $1.1 billion. Existing shareholders Fonds de Solidarite FTQ and Caisse de Depot et Placement du Quebec held the rest of its stock.By
Not much is known about stem cell metabolism, but a new study from the Children’s Medical Center Research Institute at UT Southwestern (CRI) has found that stem cells take up unusually high levels of vitamin C, which then regulates their function and suppresses the development of leukemia.
“We have known for a while that people with lower levels of ascorbate (vitamin C) are at increased cancer risk, but we haven’t fully understood why. Our research provides part of the explanation, at least for the blood-forming system,” said Dr. Sean Morrison, the Director of CRI.
The metabolism of stem cells has historically been difficult to study because a large number of cells are required for metabolic analysis, while stem cells in each tissue of the body are rare. Techniques developed during the study, which was published inNature, have allowed researchers to routinely measure metabolite levels in rare cell populations such as stem cells.
The techniques led researchers to discover that every type of blood-forming cell in the bone marrow had distinct metabolic signatures — taking up and using nutrients in their own individual way. One of the main metabolic features of stem cells is that they soak up unusually high levels of ascorbate. To determine if ascorbate is important for stem cell function, researchers used mice that lacked gulonolactone oxidase (Gulo) — a key enzyme that most mammals, including mice but not humans, use to synthesize their own ascorbate.
Loss of the enzyme requires Gulo-deficient mice to obtain ascorbate exclusively through their diet like humans do. This gave CRI scientists strict control over ascorbate intake by the mice and allowed them to mimic ascorbate levels seen in approximately 5 percent of healthy humans. At these levels, researchers expected depletion of ascorbate might lead to loss of stem cell function but were surprised to find the opposite was true — stem cells actually gained function. However, this gain came at the cost of increased instances of leukemia.
“Stem cells use ascorbate to regulate the abundance of certain chemical modifications on DNA, which are part of the epigenome,” said Dr. Michalis Agathocleous, lead author of the study, an Assistant Instructor at CRI, and a Royal Commission for the Exhibition of 1851 Research Fellow. “The epigenome is a set of mechanisms inside a cell that regulates which genes turn on and turn off. So when stem cells don’t receive enough vitamin C, the epigenome can become damaged in a way that increases stem cell function but also increases the risk of leukemia.”
This increased risk is partly tied to how ascorbate affects an enzyme known as Tet2, the study showed. Mutations that inactivate Tet2 are an early step in the formation of leukemia. CRI scientists showed that ascorbate depletion can limit Tet2 function in tissues in a way that increases the risk of leukemia.
These findings have implications for older patients with a common precancerous condition known as clonal hematopoiesis. This condition puts patients at a higher risk of developing leukemia and other diseases, but it is not well understood why certain patients with the condition develop leukemia and others do not. The findings in this study might offer an explanation.
“One of the most common mutations in patients with clonal hematopoiesis is a loss of one copy of Tet2. Our results suggest patients with clonal hematopoiesis and a Tet2 mutation should be particularly careful to get 100 percent of their daily vitamin C requirement,” Dr. Morrison said. “Because these patients only have one good copy of Tet2 left, they need to maximize the residual Tet2 tumor-suppressor activity to protect themselves from cancer.”
Researchers in the Hamon Laboratory for Stem Cell and Cancer Biology, in which Dr. Morrison is also appointed, intend to use the techniques developed as part of this study to find other metabolic pathways that control stem cell function and cancer development. They also plan to further explore the role of vitamin C in stem cell function and tissue regeneration.