Hochdorf acquires Swiss baby care company Bimbosan

By Jim Cornall contact

- Last updated on GMT

Hochdorf plans to expand Bimbosan's Swiss market share and grow internationally in China, Indonesia and Nigeria.
Hochdorf plans to expand Bimbosan's Swiss market share and grow internationally in China, Indonesia and Nigeria.

Related tags: Infant formula, Infant formula products, Nutrition

Swiss nutrition company Hochdorf Swiss Nutrition Ltd has acquired the Swiss baby care producer Bimbosan AG in a cash and share deal (10% treasury shares) for an estimated price of CHF 30m, which the company said represents approximately 2.5x and 13x EBITDA respectively.

Bimbosan, based in in Welschenrohr, Switzerland, is a Swiss premium brand sold in Swiss drug stores, pharmacies and retail, with estimated sales of around CHF 12m ($12.1m), and an operating margin of approximately 20%.

Hochdorf said the acquisition is another step closer to the end consumer in the area of baby care.

The Hochdorf Group has produced infant formula since 1908. It manufactured products mainly for the Swiss market until 2006, operating essentially as a private-label producer until the end of 2016, when it acquired a 51% share in the Pharmalys Group in its first step towards the end consumer.

Hochdorf has been producing a variety of infant food products for Bimbosan since the 1970s. Among its joint projects, it developed the first infant formula in the world without palm oil, which was launched in Switzerland by Bimbosan in 2010.

Expansion strategy

Hochdorf's strategy is to gradually expand Bimbosan's Swiss market share, which is currently at 40%, and to expand the brand and product internationally, mainly to China, Indonesia and Nigeria.

“We see the Swiss origins, the high level of brand recognition of Bimbosan in the home market and the Hochdorf network of distributors as significant factors that will influence the future success of the Bimbosan brand,”​ said Daniel Bärlocher, managing director of Bimbosan.

Bimbosan will also be distributed via Hochdorf's Pharmalys' distribution network. Hochdorf's management expects the first international revenues with Bimbosan within the next 12 months.

Full consolidation

Earlier this month, the 252 Hochdorf shareholders approved an increase in the dividend to CHF 4.0 ($4) from reserves from capital investments.

At that meeting, Dr Thomas Eisenring, CEO of the Hochdorf Group, said the 2018 business year will be a transition year.

“The current projects we have implemented to achieve our strategic goals are challenging and require time,”​ Eisenring said.

“This includes marketing the additional capacities we have in the baby care division for example, and launching the added-value products we have developed in the dairy ingredients division.”

The Hochdorf CEO also confirmed the forecast published in April for the current business year, with a net sales revenue in the area of CHF 600m to 630m ($604m-$635m) and a percentage EBIT compared to production revenue of 7.0 to 7.5%.

Full consolidation will be retroactive to April 30, 2018, and Hochdorf said its earnings expectations have not changed based on the acquisition.

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