Danone has struck a deal to acquire Functional Formularies, a US whole foods tube-feeding business.
The France-headquartered dairy giant has snapped up the Ohio-based company from private-equity business Swander Pace Capital for an undisclosed fee.
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The move has extended Danone’s medical nutrition portfolio, through which it develops products for people with special medical needs, adding to its enteral tube-feeding ranges.
Juergen Esser, deputy CEO and CFO at Danone, said: “We are confident that with the addition of the greatly differentiated product portfolio of Functional Formularies, which complements our existing Real Food Blends branded range, we are even better positioned to support the nutritional needs of tube-fed families and patients.”
Danone’s medical nutrition business is part of its wider “specialised nutrition” division, which also includes products for infants like baby food and formula. The company says medical nutrition products account for approximately 40% of the division’s sales.
“I am so proud of our team’s ability to deliver high quality ingredients to help with improved patient outcomes,” said Marc Gibeley, CEO of Functional Formularies.
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In Danone’s full-year results for 2023, its specialised nutrition segment generated €8.5bn ($9.1bn), up 3.3% on 2022. The unit reported recurring operating profit of €1.77bn, down from €1.8bn the previous year.
In the opening quarter of this year, specialised nutrition returned €2.18bn in net sales, up 1.9% year-on-year.
Last September, Danone announced an investment into its medical nutrition segment by expanding a factory in Poland, spending €50m to add a production line at its plant in Opole.
The following month, the Activia yogurt owner invested €15m ($15.8m) in a factory expansion in Turkey for medical nutrition products. Shortly after, it expanded the line of products it sells in China for adults with special medical needs, adding its Fortimel brand to the local portfolio.
