Business support services company DCC has announced a deal to buy US firm Amerilab Technologies for about $85m.

Amerilab Technologies is a specialist provider of contract manufacturing and related services in effervescent nutritional products, based near Minneapolis.

DCC, which is headquartered in Dublin and listed in London, said the deal is its Health & Beauty Solutions division's third acquisition in the US market, after the purchase of Ion Labs in November 2019 and Elite One Source in February 2018. 

Today's deal is a further significant step in the execution of its strategy to build a business of scale in the world's largest health supplements and nutritional products market, it added.

Amerilab specialises in the manufacture of effervescent nutritional products in powder and tablet formats, which are packed in stickpacks, sachets and tubes. 

DCC noted that effervescents are a higher growth product segment within the US nutritional market, with attractive demographic characteristics and environmental credentials. 

DCC said its new business is expected to generate returns consistent with the existing Health & Beauty business within two years. 

Under the terms of the deal, Amerilab Technologies, which employs 125 people and has revenues of about $68m, will continue to be led by its management team. 

Donal Murphy, chief executive of DCC, said the acquisition of Amerilab significantly enhances its existing presence in the US market.

Noting that the US is the world's largest health supplements and nutritional products market, Mr Murphy said it is also an innovative, high-growth market, with a fragmented contract manufacturing base. 

"We continue to be excited by the significant opportunities for organic and acquisitive growth in this market. We believe this market will benefit from current events as consumers are likely to be increasingly conscious of their health and wellbeing," he added.