IFF to acquire contract manufacturer Health Wright Products
HWP, which was founded in 1995, is a privately owned contract manufacturer based in Clackamas, a suburb south of Portland. The company boasts a manufacturing site encompassing 165,000 square feet that employs 225 workers. The company touts that the facility was designed and is operated to OTC standards, which includes a special desiccant dehumidification climate control system that maintains a constant temperature of 68 F with 20% relative humidity.
HWP already had relationship with IFF
HWP advertises a concentration on the manufacture of products in capsules. It was manufacturing probiotics products of IFF’s Health & Biosciences arm for a number of years.
The financial terms of the deal were not disclosed. HWF, being privately held, does not disclose detailed earnings statements, but the acquisition press release stated that HWP had generated about $100 million in annual revenue in 2021. Acquisitions values are in general priced as a multiple of EBITDA, which is itself a subset of annual revenue.
IFF says the deal will “bring formulation and finished format capabilities to IFF’s Health & Biosciences probiotics, natural extracts and botanicals businesses, allowing for innovation in custom formulation and combination products through joint capabilities.”
IFF and DuPont received final regulatory approval in late 2020 for a $45 billion merger that created an industry giant with capabilities in probiotics and other supplement categories, foods, flavors and fragrances. DuPont’s former health and wellness divisions were folded into IFF to create a new company under the IFF name.
In 2017 DuPont had acquired the health and wellness portions of FMC Corporation with the exception of its omega-3s business in a deal valued at $1.6 billion. In 2011 DuPont took a huge step into the probiotics space with the acquisition of Danisco.
HWP's new parent took in $11.7 billion in 2021
IFF recently reported its year end earnings report, notching $11.7 billion in sales in its fiscal 2021 which represented 10% year over year growth. During a call with stock analysts last week the company said it expects revenue in 2022 to come it at between $12.3 billion and $12.7 billion
“Today’s announcement is driven by our commitment to enhance long-term value to our partners and customers. Producing thousands of unique and complex formulations for the industry’s most trusted brands, Health Wright Products formulation and finished format abilities will allow us to develop new and customized solutions and formats for a broad base of customers,” said Simon Herriott, President, IFF’s Health & Biosciences division.
“We look forward to joining IFF’s Health & Biosciences division. Health Wright Products best-in-class quality manufacturing and formulation capabilities, combined with the strong biotech innovation pipeline of IFF’s Health & Biosciences, is an exciting proposition for our customers and employees,” said Mark Wright, President, Health Wright Products.
Fate of bonus program
Last year, in a time when manufacturers were struggling to meet booming demand and asking employees to work long hours, HWP had announced a bonus program to reward its workers. The top bonus level was set at $5,000 and the payout was triggered for when the company passed the $150 million annual revenue milestone. The company said at the time the program was announced that $1 million had been earmarked to fund the bonuses.
"As a result of the IFF acquisition of Health Wright Products, Project 150 and the accompanying Million Dollar Promise will be kept. Integrity and a commitment to our incredible HWP Team is at the core of our values. The HWP Million Dollar Promise to our employees will not only be maintained, but improved," Wright said.
