CVC to buy sports nutrition specialist The Quality Group

Min Ho
20 May 2022

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CVC Capital has agreed to acquire a majority stake in The Quality Group, a German manufacturer of sports performance nutrition products and healthy and low-sugar food alternatives.

The current owners of TQG will reinvest in the deal as minority shareholders, according to a press release. Founders Benjamin Burkhardt and Christian Wolf will continue to play key roles in the operational development of TQG.

The sponsor is investing through CVC Capital Partners VIII, which held a final close on EUR 21.3bn in July 2020. The vehicle invests primarily in Europe, but also in North America, according to Unquote Data.

CVC will seek to further accelerate the business's growth by scaling its logistics activities and improving customer experience, according to the press release. It plans to expand TQG's product portfolio in both the DACH region and internationally.

Mergermarket reported in March that TQG had launched a process to find an investor advised by Carlsquare. The company, whose brands include Fitmark, ESN, More Nutrition, GOT7, Synergy, and VAYU, was marketed off EUR 67m EBITDA and revenues of EUR 194m in 2021. Several large financial sponsors were eyeing the primary buyout opportunity, which was pitched as an equity story of aggressive growth, with revenues forecast to triple by 2025 and EBITDA predicted to grow even faster, the report said.

Closing of the transaction is subject to approval by the relevant regulatory authorities and is expected for the end of the second quarter of 2022.

Company
TQG is a manufacturer of sports performance nutrition products including protein powder, weight management products, vitamins and sports supplements. The company was formed in 2020 through the merger of "ESN" and "More Nutrition". It is headquartered in Elmshorn, near Hamburg, and has 360 employees. TQG focuses on the sale of its products via its own web shops and through its 300 influencers partnership network.

People
The Quality Group – Benjamin Burkhardt and Christian Wolf (founders)

Advisers
Vendor – Carlsquare (corporate finance); Ommax (commercial due diligence).
Equity – Houlihan Lokey (corporate finance).