Japanese health food company acquires Daiya Foods

Tokyo-headquartered Otsuka Pharmaceutical says that after the $325m deal is finalized, the plant-based cheese alternative supplier will become a pillar of its nutraceuticals business.

Privately-held Canadian plant-based foods producer Daiya Foods has been purchased by a subsidiary of healthcare-focused Japanese holding company Otsuka for C$405 million ($325 million; €277 million), the company announced last week.

Upon approval by Daiya’s shareholders, the deal will see the Vancouver-based company become an independent subsidiary of Otsuka Pharmaceutical, itself a subsidiary of Otsuka.

Daiya offers dairy-free, gluten-free and soy-free versions of yogurt, salad dressing and a wide variety of cheese alternatives. Established in 2008, the company’s offerings are sold in both specialty and mainstream grocery channels throughout the US, as well as Australia, Sweden, Mexico, Hong Kong and elsewhere.

According to Otsuka’s statement, Daiya tripled its sales in the three years ending in 2016 and has generated C$90 million in net sales over the past year.

“We are bringing together two leading companies committed to health and wellness; this acquisition will enable us to carry forward with our mission of bringing plant-based vegan foods to people around the world,” Daiya wrote about the deal on its website. “We see this partnership as a big step forward to making plant-based food mainstream and ultimately creating a kinder world for people, the planet and animals.”

Otsuka Pharmaceutical is a global healthcare company with distinct units devoted to the development of prescription drugs and nutraceuticals, which it defines as food and beverages that contribute to health and wellness. Products currently in its nutraceuticals portfolio include asparagus-derived sleep-quality enhancing water supplement Kenja-no-kaimin, French nutritional biscuit provider Gerble, and FIBE-MINI, which provides vitamin C and dietary fiber in liquid and jelly form.

“Daiya has developed a portfolio of high-quality, unique plant-based nutrition products and built a strong brand with loyal customers,” Otsuka president and representative director Tatsuo Higuchi said in the statement. “We believe that this will be an important pillar for our neutraceutical business.”

The deal demonstrates continued investor interest in nutraceuticals, which are thought to benefit from the growing health-consciousness of consumers.

In June, mid-market private equity firm HGGC executed a $446 million take-private for then NASDAQ-listed nutraceuticals provider Nutraceutical International Corporation. Earlier in the year, Vitalus Nutrition, a Canadian company that provides ingredients to the nutraceutical sector, received an investment of an unspecified size from Fulcrum Capital Partners.