Vape giant Supreme buys Slimfast in £20m deal
Wholesaler Supreme has bought meal replacement and weight management brand Slimfast in what promises to be an immediately earnings-enhancing deal, analysts have said.
The deal, which saw Supreme buy Slimfast UK and Europe for £20.1m, sent the former company’s share price up more than six per cent in early trades.
Slimfast is known for its meal replacement shakes, bars, snacks and weight loss plans.
The company’s UK and European assets reported unaudited revenue of £25.5m and adjusted gross profit of £9.7m in 2024.
Equity analyst at Shore Capital, Darren Shirley, said the acquisition was “further evidence of Supreme’s strong entrepreneurial spirit”, adding that he “welcome[d] further diversification from the UK vaping market”.
The transaction will see Supreme venture further into the health and wellness market.
While it currently makes the majority of its revenue from the sale of vapes, Supreme already sells a variety of sports nutrition and supplements including Sci-Mx, Battle Bites and Sealions. It also owns Typhoo Tea.
“[Slimfast will] help further dilute the importance of vaping whilst bolstering the Group’s presence in a fast-growing market where Supreme has only limited exposure,” Zeus analysts said.
Slimfast offers “meaningful synergies”, Zeus analysts said, with manufacturing of powdered products brought in-house and further cross selling into Supreme’s distribution platform.
The UK weight management market is estimated to grow at a 9 per cent annually to 2027 and reach £1.5bn, according to Grand View Research.
Slimfast ‘ideally placed’ for GLP-1 boom
Supreme said that SlimFast is “ideally placed to capitalise on the growing demand for GLP-1 products”, which require nutrition and protein supplementation both during treatment and as an ideal ‘follow-on’ to treatment.
GLP-1, or glucagon-like peptide-1, is a natural hormone that helps regulate blood sugar and appetite.
Four per cent of households in the UK now have at least one member using GLP-1, the active ingredient in weight-loss drugs.
The share of UK households with at least one GLP-1 user has almost doubled in size from 2.3 per cent to 4.1 per cent in the last year.
Its popularity has already started to affect grocery sales, with categories like crisps, sweets and peanut butter most affected.
The market for weight-loss drugs hit around $50bn (£36bn) by the end of 2024 and is expected to double by the end of the decade, according to Morgan Stanley.
Sandy Chadha, chief executive of Supreme, said that the commercial oppprtunities of Slimfast mean it is an “ideal addition” to the business.