CytoSport, the maker of Muscle Milk, is up for sale, according to two sources claiming knowledge of the situation. Benicia, California-based CytoSport hired Goldman Sachs to run an auction that began about a month ago, one of the sources said. A spokesperson for CytoSport had no immediate comment.
CytoSport is in exclusive talks with PepsiCo, one of CytoSport’s distributors, said the first source claiming knowledge. If PepsiCo passes on it, other buyers like Nestle SA could be interested, the source said. A spokesperson for PepsiCo declined comment.
PepsiCo signed in November 2008 a contract to distribute Muscle Milk in the US and Canada.
GNC, the Pittsburgh-based drugstore chain, and private equity firms are more likely buyers of CytoSport than Coca-Cola or PepsiCo, an industry banker said.
This news service reproted in 2008 that CytoSport was an attractive target.
GNC is a more likely buyer because CytoSport is targeting a different health and wellness channel than Coca-Cola and PepsiCo, the banker said. With CytoSport’s strong focus on the energy/protein and supplement market, it makes more sense for a company already involved in those channels (such as GNC) to acquire CytoSport as opposed to Coca-Cola and PepsiCo, which do not operate in similar channels.
CytoSport’s revenue is USD 200m and EBITDA is around USD 25m, the first source pointed out. The company could easily sell for a 2x to 3x multiple of sales, however, the source added.