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Carmel-based Heartland acquires Splenda, plans expansion

August 25, 2015

Heartland Food Products Group announced Tuesday that it plans to acquire low-calorie sweetener brand Splenda, creating the need for a major expansion at its Indianapolis-area operations.

The Carmel-based company, which produces low-calorie sweeteners, drink mixes, coffee and nutritional beverages, said it entered into an agreement to acquire the brand from McNeil Nutritionals LLC, a subsidiary of Johnson & Johnson.

The acquisition is expected to create more than 100 jobs at Heartland’s corporate offices and at its Indianapolis manufacturing plant and distribution center.

Financial terms of the transaction were not disclosed. The deal is expected to be finalized before the end of the year.

Reuters reported in December that Johnson & Johnson hired Goldman Sachs to explore selling its Splenda business, which has annual revenue of about $300 million.

“We are very excited about our opportunity to own the Splenda brand business and welcome a talented team of professionals to our organization,” Heartland Chairman and CEO Ted Gelov said in a written statement. “Splenda fits well within our strategy to offer the very best tasting products to sweeten foods and beverages without adding calories.”

Heartland has been working on the deal with New York-based Centerbridge Partners LP, an investment firm with $25 billion in assets under management. Centerbridge will become a shareholder in Heartland once the purchase is completed.

Heartland already sells products with sucralose, the ingredient used in Splenda, but the transaction brings it a well-known brand name. The two companies have previously sparred in court. McNeil Nutritionals sued Heartland in 2006, claiming its packaging of store-brand sweeteners diluted Splenda’s trademark and misappropriated advertising ideas. The two sides settled the case in 2009.

Sucralose, approved by U.S. regulators in 1998, has overtaken aspartame in the sweetener market. But the broader industry has suffered a backlash from food activists, who are urging consumers to abandon artificial ingredients.

The Center for Science in the Public Interest changed its rating of sucralose from “safe” to “caution” in recent years. J&J has pointed to 20 years of research and more than 110 scientific studies to demonstrate that the ingredient is safe.

Some companies, including Pepsi, have switched from aspartame to Splenda because sucralose is considered by some to be safer than aspartame.

Last April, Heartland said it would undertake a $21 million expansion that would lead to 160 more jobs by the end of 2017. The company had 300 employees at the time.

Heartland got its start as Heartland Packaging and moved into the artificial sweetener business in 2004. Its products include Skinnygirl Sweetners and Sunkist water enhancers and liquid drink mixes.






 

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