The transaction will enhance Hi-Tech’s leading Sports Nutrition and Weight Loss arsenal and expand its position as the leader in Diet & Energy products in the United States.
"The acquisition of the Innovative brand of Diet & Energy Aids accelerates Hi-Tech’s Sports Nutrition and Weight Loss growth strategy, substantially boosts our Weight Loss portfolio and diversifies our business stream," stated Hi-Tech Chairman, President and CEO Jared Wheat.
"We believe this strategic transaction will enhance our industry-leading Weight Loss and Sports Nutrition position by expanding market opportunities. Innovative has strong distribution to enhance our position with Sports Nutrition distributors and Retail outlets."
Wheat continued, "Our strong operational structure and aggressive acquisition strategies have enabled the continued growth of our Sports Nutrition and Weight Loss business and will increase profit margins due to ability to bring the production of Innovative products to our industry-leading manufacturing facilities."
As a leading provider of premium Weight Loss and Bodybuilding products in the sports nutrition category, Innovative’s brands align with the company’s continued focus on Sports Supplements, while further diversifying the Hi-Tech portfolio. Innovative produces Black Mamba Hyperrush, Diablos ECA Fire Caps, Diablos Hyperburn, and Hell Fire- some of the top Diet & Energy Aids in the industry, which will continue to bolster our Diet & Energy portfolio such as: Fastin, Lipodrene, Stimerex-ES, Ionamin, Lean EFX, Phenadrine, Black Widow, White Lightning, ECA Xtreme, and HydroxyElite.
Key Benefits of the Transaction:
- Accelerates Sports Nutrition and International Growth Strategy
- Expands market access across a larger global platform in all key countries
- Increases market share in Diet & Energy category with top brands like Black Mamba Hyperrush®, Diablos ECA Fire Caps, Diablos Hyperburn, and Hell Fire
- Positions Hi-Tech to capture additional share of the $30 billion Sports Nutrition market
Just the sports nutrition category, which includes powdered and ready-to-drink, grew by 13 percent in 2013, a healthy jump from an already strong 11.7 percent the previous year. The largest portion of the sales in that market comes from sports and energy drinks and shots, which make up 56 percent of sales ($17.1 billion).
The second largest category is sports nutrition supplements at 15 percent ($4.5 billion), followed closely weight-loss meal replacement supplements at 11 percent ($3.3 billion) and Weight-loss pill-form supplements at 6 percent ($2 billion).
"Black Mamba Hyperrush, Diablos ECA Fire Caps, Diablos Hyperburn, and Hell Fire products will serve as a growth catalyst for our Weight Loss segment, providing this division with several leading brands in the high-growth sports nutrition category," said Steve Smith, Executive Vice President at Hi-Tech Pharmaceuticals.
"The acquisition of Innovative expands our offerings of mainstream, weight loss and sports nutrition products, including protein-rich foods, and broadens our appeal with younger consumers. Innovative’s premium Diet & Energy aids further enhance our balanced business model."
Brandon Schopp, Vice-President of Contract manufacturing with Hi-Tech, commented, "Hi-Tech’s impeccable reputation for pharmaceutical-grade quality, strong innovation and manufacturing expertise make it a perfect complement to Innovative’s brand of diet products. Additionally, having access to our extensive production capabilities across a variety of product formats such as energy shots and ready-to-drink beverages, and being able to offer our customers access to manufacturing and distribution facilities in Atlanta, Georgia and Reedsville, Pennsylvania is a significant competitive advantage.
"The merger, in combination with an expansive capital investment program, will create world-class formulation, product development and production capabilities across in excess of 400,000 square feet of manufacturing space.
"Compliance and enforcement have raised the bar for manufacturers, and this merger creates a top-tiered company with an incredible manufacturing scale and capabilities in an otherwise fragmented segment of the market. Hi-Tech and its Sports Nutrition brands will be a one-stop shop for Sports Nutrition stores," said Schopp.
"Hi-Tech remains true to the principals that the company was built on – innovation, quality and consistency, and will always be dedicated to ensuring that these principals remain uncompromised. Hi-Tech will continue to provide the finest-quality, innovative, science-based Sports Nutritional supplements and Diet & Energy Aids," says Wheat.
Other nutrition companies looking to increase scale, revenue, market share, and competitive advantage have also been active with mergers and acquisitions. Hi-Tech has been able to increase its market share in the United States through the acquisition of Florida-based Synergy Nutritional Industries in 2005, and gained a larger market share when it acquired Advanced Performance Supplements ("APS") in 2011.
Hi-Tech gained further industry dominance when it acquired Nittany Pharmaceuticals in Pennsylvania and ALR Industries in California in 2012. Hi-Tech’s recent strategy has been, and according to its leaders will continue to be, growth through M&A activity. In 2015, Hi-Tech has acquired Advanced Pharmaceuticals and Nutritionals, FormuTech Nutrition and with the most recent acquisition by Hi-Tech of Innovative laboratories it is the third acquisition for Hi-Tech and will not be the last of the year.