GlaxoSmithKline has completed the acquisition of CNS, Inc., the marketers of Breathe Right nasal dilator strips and FiberChoice dietary fiber supplements.
GSK has acquired all outstanding CNS shares for $37.50 in cash per share, valuing the transaction at approximately $566 million.
CNS, based in Minneapolis, Minnesota, USA, reported sales of $122.2 million for the twelve-month period ended September 30, 2006, an increase of 20 per cent over the previous 12-month period ended September 30, 2005. The US market generates 86 per cent of the company's sales.
Breathe Right branded products are marketed in 27 countries. FiberChoice fiber supplements are marketed solely in the US.
Commenting on the transaction, John Clarke, president, GSK Consumer Healthcare, said, "We are very pleased to welcome this outstanding business into the GSK Consumer Healthcare family. CNS is a well-managed company, and its brands fit with our growth strategy and are great additions to our portfolio. The opportunity for growth through geographic expansion and pipeline innovation make this acquisition an exciting prospect."
Marti Morfitt, president and CEO of CNS also commented on the transaction, "I am very proud of our achievements at CNS and the success we have built around our brands, and am pleased that our good work will continue with GSK as these brands realize their worldwide potential. GSK's professionalism, with their track record of successfully integrating brands and people, will allow for even greater successes for Breathe Right and FiberChoice."
Breathe Rightstrips are the leading nasal dilator strips worldwide, and FiberChoice is the fastest growing line of dietary fiber supplements in the United States. Patents in the US support both brands and key markets worldwide, and by scientific evidence for their product claims.
The sales growth of the Breathe Right brand and the FiberChoice brand is driven by consumer insights and a focused strategy that has been very successful. The Breathe Right brand has delivered 12 per cent and the FiberChoice brand 54 per cent compound annual sales growth over the past three years. For GSK, the transaction will be neutral to earnings in 2007, and accretive from 2008.
The Breathe Right brand features a line of nasal dilator strips and a line of snore relief products that are taken orally. Breathe Right strips treat snoring and nasal congestion caused by colds (94% people), allergies (69% people), snoring (50% people), sinusitis (19% people), and deviated septum (10%).
The FiberChoice brand offers a line of chewable fiber supplements with a 'Fiber for Health' positioning. FiberChoice is the fastest growing brand of fiber supplements. FiberChoice is currently sold in the US only.