Market Analysis – Specialized Nutritional Health Stores in Canada
EBITDA Multiples Based on Market Comparables in the Targeted Market for Specialized Nutritional Health Stores (Source: DealStats)
The average EBITDA multiple for comparable companies is 4.7x.
What is EBITDA?
EBITDA = Earnings Before Interest on Long-Term and Short-Term Debt, Taxes, and Depreciation.
EBITDA Multiples in the Professional, Scientific, and Technical Services Sector (Source: DealStats)
In the general professional services sector, the average EBITDA multiple over the past 12 months is 3.7x (Q1 2024).
Competitors and Number of Companies in Canada and Quebec in 2023 (Source: Ibisworld Inc.)
Market share of the 3 largest promotional item distributors in Canada:
GNC Holdings Inc. (2.1%) – GNC was sold to Harbin Pharmaceutical Group Co., a Chinese public company, in October 2020 for $780 million.
Popeye’s Supplements Canada (0.9%)
Nutrition House Canada Inc. (0.2%)
Number of establishments in Canada:
12,568 establishments generating $6.2 billion in revenue.
Number of establishments in Quebec:
2,044 establishments (16%) generating $999 million in revenue
(1,473 in Montreal, 230 in Quebec City, and 341 elsewhere)
Approximately 50% of the businesses listed above are in fact self-employed individuals with no employees.
Revenue breakdown by product/service segment:
Vitamin and mineral supplements (48.9%)
Cosmetics and beauty products (22.5%)
Sports nutrition products (14.9%)
Revenue breakdown by client age group:
Ages 40–54: 24.7%
Ages 55–64: 21.5%
Ages 30–39: 19.7%
Strengths, Weaknesses, and Opportunities (Source: Ibisworld Inc.)
Strengths:
Low import rate Growing industry Low customer concentration Low capital investment requirements
Weaknesses
Low entry barriers High competition Low profit margins compared to the sector Low revenue per employee High product/service concentration
Opportunities
Expected revenue growth from 2023 to 2028 Growing population aged 65 and over
Key Success Factors for Businesses in This Sector (Source: Ibisworld Inc.)
Businesses that manage an effective e-commerce platform are at an advantage. They must be quick to adopt new technologies.
Businesses that develop a loyal customer base through discount programs are better positioned.
Companies with strong, long-term relationships with key suppliers can maintain low purchasing costs and reasonable delivery times—allowing them to offer competitively priced products.
Offering niche, natural, and organic products not found in big-box stores is a key advantage.
Access to highly qualified employees in health and naturopathy enables personalized service and strong client retention.
Operating in high-visibility urban locations is a strategic advantage.
Proximity to key markets (e.g., near fitness centers or medical clinics) is beneficial.
A strong and recognized brand helps businesses stand out through reputation.
Relevant Financial Figures (Sources: Ibisworld Inc. and DealStats)
Average current ratio = 1.4 (2021)
Average accounts receivable collection period = 10 days (2021)
Expense breakdown as a percentage of revenue:
Salaries (22%), Purchases (54%), Rent (5.4%), Profit (3.9%) according to Ibisworld
According to our analysis at pntt: Salaries (18%), Purchases (67%), Rent (4%)
Average EBITDA margin = 13% (DealStats); according to pntt: 9%
Factors Influencing Industry Growth Through 2028 (Source: Ibisworld Inc.)
This industry heavily depends on household discretionary income, as the products are often perceived as non-essential.
The obesity rate in Canada is expected to decline, suggesting Canadians are becoming more health-conscious.
The population aged 65+ is expected to increase, which favors this industry.
Health care spending is expected to increase in the coming years.
Disposable income per capita for non-essential products is expected to decrease in 2024, with a slight decline continuing in subsequent years.
The share of people aged 65+ may slightly decrease in the coming years.
The adult obesity rate in Canada (60% in 2024) is expected to slightly increase, which could negatively impact the industry.
Sources
- IBISWORLD
“Specialized Nutritional Health Stores in Canada” – NAICS (44619 CA)
“Specialized Nutritional Health Stores” – NAICS (44619 QC)
BVR:
DealStats – NAICS (44619) – Revenue between $1,000,000 and $10,000,000
DealStats Value Index Q1 2024
Important Note:
This is only a rule-of-thumb analysis. Numerous positive and negative factors can influence the results presented above. It’s important to understand that every business is unique. Additionally, the sale price largely depends on the number of interested buyers, their potential synergies with the target company, and the return on investment they are seeking.
Disclaimer:
pntt makes no representations to any party regarding the completeness or accuracy of the data or information contained in this document. pntt accepts no liability and disclaims all responsibility for any loss or damage suffered by any person as a result of using the information contained herein.
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