Salt Lake City; Anaheim, Calif.—Genysis Brand Solutions, a Salt Lake City-based manufacturer of functional powders, announced Tuesday that it has been acquired by Nellson Nutraceutical, a leading North American formulator and manufacturer of branded and private-label nutritional bar and functional powder products. Genysis affiliates Dyad Labs (formerly Genysis Labs) and Sensapure Flavors have been spun out as independent entities and are not included in the transactions.
The business combination strengthens Nellson’s powder production capabilities, expands its product lines and channels, and diversifies its customer mix. “The combination with Genysis, together with the recent opening of our state-of-the-art bar-making facility in Ontario, California further strengthens our position as a strategic partner of choice within the fast-growing nutritional bar and functional powders sectors” said Jamie Better, Chief Executive Officer of Nellson. “This acquisition replicates in powders what we achieved in bars three years ago through our acquisition of Multibar, as it combines two respected functional powder manufacturers to create the clear category leader with remarkable capabilities in new product development and best-in-class manufacturing.”
Genysis will operate as a subsidiary of Nellson. Adam Schwinghammer, President of Genysis, who will stay on as a key member of the executive management team, said: “We are excited about merging with Nellson, and capitalizing on the respective strengths of the two companies in order to benefit our current and prospective customers.”
The combined company will have five manufacturing and R&D facilities, offering greater capabilities to customers both in the U.S. and Canada, as well as internationally.
As part of the agreement with Nellson, Sensapure Flavors will conNnue to provide powdered flavorings to Genysis Brand SoluNons. AddiNonally, within the next few months, Sensapure Flavors will relocate to a nearby facility to accommodate the needs of the growing business.
“Over the years of sourcing specific flavors from the global providers for our nutraceutical brand partners, we realized that no flavor houses were focused on serving the supplement nutrition industry,” said Jeff Reynolds, founder and CEO of Sensapure Flavors. “The flavoring needs of the nutraceutical industry are complex and ever changing. Being able to launch this company with a leader in the industry like Genysis Brand Solutions is a win/win.”
In preparing to operate as an independent company and to support the anticipated growth of the business, Sensapure has hired certified flavor chemists (a first for a Utah-based nutrition company) as well as a team of industry veterans in the nutrition space. The process of creating natural and artificial flavors involves literally thousands of extracts, chemicals and oils and then ge`ng those ingredients into a powder form where they can by combined with active ingredients such as protein, amino acids, and others requires a process called spray drying.
The new Sensapure facility, located in the Pioneer Square Business Park at the intersection of I-215 and 2100 South in Salt Lake City, will have over 30,000 square dedicated to flavor labs, flavor manufacturing and offices for the Sensapure team based in Salt Lake City, Utah. The flavor labs will consist of a flavor creation lab (used for creating liquid flavors), an applications lab (used to test different flavors with different functional ingredient bases) and a sensory lab (used for taste testing).
In addition to the Utah headquarters, Sensapure has secured a location in Southern California, for a flavor technology office, with the same suite of flavor laboratories. This R&D lab will open in the spring of 2018. The Utah campus will also house Dyad Labs, an analytical testing lab also spun off as part of the transition. An open house of the Utah facility is scheduled for Spring of 2018.
Dyad Labs will continue to provide testing services to Genysis Brand Solutions as part of the transaction agreement between Genysis Group and Nellson. Additionally, within the next few months, Dyad Labs will relocate to a nearby facility to accommodate the needs of the growing lab.
In 2008, Genysis Labs began as an in-house testing laboratory for Genysis Brand Solutions, a large contract manufacturer of nutritional supplements. As Genysis Brand Solutions expanded over the years, the lab also grew in size and scope to offer a full range of chemical and microbiological testing services using state of the art equipment. This increase in capabilities and expertise resulted in the acquisition of additional third-party national and international clients and positioned Dyad Labs to be successful as a stand-alone laboratory.
The new Dyad Labs facility, located in the Pioneer Square Business Park at the intersection of I-215 and 2100 South in Salt Lake City, will have over 20,000 sq. feet of laboratory space to allow for the addition of new testing services, equipment, and staff. An open house of the new facility is scheduled for Spring of 2018.
Jeff Reynolds, founder and president of Dyad Labs said, “In order to better serve our clients’ testing needs, we knew we had to add space and expertise. This agreement allows us to continue to serve Genysis Brand Solutions while making room for our growing base of third-party clients, including other food and dietary supplement manufacturers.”
Nellson is a portfolio company of Kohlberg & Company, LLC, a leading private equity firm headquartered in New York.
Seth H. Hollander, Partner at Kohlberg, commented: “Since our acquisition of Nellson in 2013, we have been focused on identifying acquisitions as a means to grow and expand our capabilities, product offering and customer base. Genysis represents a key step toward that end.” Hollander added, “Nellson and Genysis are highly complementary businesses, and we are pleased to capitalize on this unique opportunity to create a larger, more diversified company capable of better serving our combined customer bases.”
Antares Capital has provided Nellson with fully committed credit facilities sufficient to close the transaction. Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal counsel to Nellson. Houlihan Lokey acted as financial advisor to Genysis.