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Here’s a setup I’ve learned to watch closely over the years. Take a company growing revenue at a double-digit clip, growing earnings at double digits, earning a 15% return on invested capital, and expanding internationally north of 30% a year. Now watch its stock go almost nowhere for five years while the valuation quietly sinks to historic lows. That combination does not stay ignored forever. Sooner or later, someone with a checkbook notices the disconnect. And that is exactly what has happened here.
The company is Jamieson Wellness, and I’d bet 80 to 90% of you reading this have one of their products sitting in a cupboard right now. It’s a small cap that barely registers on most investors’ radar, and it just confirmed that it has received an unsolicited offer to be acquired. The number being whispered is meaningfully higher than where the stock trades today.
The situation
Jamieson changes hands around $40 to $41 a share, which puts its market cap near $1.69 billion. A few weeks back, the company confirmed that following an unsolicited inbound proposal, its board had launched a process to enhance shareholder value and was in discussions with interested parties about a potential transaction. Stripped of the corporate language, that means somebody made a real offer for this business behind closed doors, and the board has now hired advisors to decide whether the price actually does right by shareholders.
The rumored figure is north of $2 billion, and a fair number of analysts think a deal could land between $2 billion and $2.5 billion. On the low end, $2 billion is roughly a 17% premium to today’s price. On the high end, the premium gets a lot more compelling. There was even chatter, in a few articles I couldn’t get past the paywall, of an offer above $50 a share. Against a $40 stock, that is serious upside for what amounts to an arbitrage play.
This pattern keeps repeating in Canada
None of this happens in a vacuum. Cheap, quality Canadian small caps getting scooped up is a story I’ve watched play out again and again, precisely because these names get so little attention that their valuations detach from their growth. Think about Park Lawn. It ran into some debt trouble during the 2022 rate spike, the stock got hammered down to a discount, and then it was taken out at a premium north of 30%. Or look at what happened just a few weeks ago with Andrew Peller, another overlooked Canadian small cap trading at a depressed valuation. Fairfax Financial came along and bought it for a 40% premium. The market ignores these companies right up until someone doesn’t.
Why the structure makes a deal easier
Here’s a detail that matters more than most people realize. Jamieson is very widely held, and that makes a clean transaction far more likely. Institutions own more than 60% of the company, but the largest single shareholder holds only around 15%. Insiders own less than 1%.
Why does that matter? Because there’s no controlling holder who could either force through a lowball deal just to cash out, or block a fair one that everyone else wants. A takeover would simply go to a straight shareholder vote, without a single dominant owner able to jam a wrench in the works. That’s a cleaner setup than a lot of founder-controlled or family-controlled Canadian names, where one voting block calls the shots.
A deal is not guaranteed, and that’s fine
Let me be honest about the risk. There is no guaranteed transaction here. This is different from a situation like Lightspeed, which publicly said it was exploring a sale rather than fielding a concrete bid. In Jamieson’s case there is an actual offer on the table from someone who wants to own the business, and the company now has to decide whether the price is right. But offers fall apart, and the final number could come in well below what analysts are floating. The people predicting that $2 billion to $2.5 billion range are analysts. Nobody outside the room knows the real figure.
And this is the part that makes the setup attractive to me. If the deal happens, great, you likely collect a premium over a short holding period. If it doesn’t, you’re not left holding some junk company you were only ever renting in hopes of a buyout. You own a genuinely good business. The acquisition is the bonus, not the whole thesis.
What Jamieson actually is
Jamieson is one of the largest vitamin manufacturers in Canada, and that scale gives it a real moat. There’s competition, sure, but Jamieson has a stranglehold on the domestic market and sits at number one in share. The Canadian vitamin market itself isn’t a fast grower, but it doesn’t need to be, because the international side is doing the heavy lifting.
The long-term numbers tell the story. Back in 2014, Jamieson did around $193 million in revenue. In 2025 it hit $822 million, and 2026 guidance runs to roughly $935 million at the high end. That’s a five-year revenue compound growth rate of about 15.3%. Adjusted EBITDA has compounded around 12.4% over that stretch, and earnings per share around 8.8%.
That earnings number looks softer than the rest, and there’s a specific reason for it. In 2022, Jamieson made a large acquisition of a US brand called Youtheory, and it took on a lot of debt to get the deal done. The timing was rough. Long-term debt ballooned from roughly $149 million to over $400 million right as interest rates were climbing, so the interest bill spiked and earnings took the hit. You can see it clearly in the numbers: interest expense went from about $5 million before the deal, to $12.4 million, to $22.8 million, and it still sits around $22.6 million today.
Here’s why I’m not scared of it. EBITDA is now growing into that debt, so the interest coverage keeps improving, and this is nowhere near the dicey situation it looked like in 2022 and 2023 when nobody knew how high rates would climb. I’d still like to see them pay down more, but the debt is comfortably serviceable and getting easier every quarter.
Look past the interest-expense dip and the trajectory is clean. Earnings per share were $1.85 in 2025 and are guided to as high as $2.21 in 2026. Compare that to the $1.32 they earned in 2021, and you’re looking at roughly 67% earnings growth over six years. This is not a hypergrowth story, but it’s not a sleepy one either. It grows at a meaningful pace across almost every metric, in a boring defensive industry nobody is watching.
The dividend
For income investors, the dividend is one of the more attractive pieces here. Jamieson has raised it every single year since its 2018 IPO, taking it from around $0.55 to roughly $0.96, close to a double. The payout ratio sits near 51%, which is comfortable. Operating cash flow has more than doubled from 2023 to 2026 estimates, which is what funds those raises.
There was some hand-wringing when the company kept hiking the dividend by double digits right after loading up on Youtheory debt, with plenty of holders arguing they should have prioritized paying the debt down instead. I understand the concern, but the dividend looks stable and well-covered, and it sits inside an industry where the revenue base is protected by that dominant Canadian share and brand.
China is the growth engine
So where does the growth come from if the Canadian market only grows 4 to 6% a year? The answer is China. China is one of the largest vitamin, mineral, and supplement markets on the planet, with something like a $30 billion opportunity, and Jamieson’s 2026 growth target there is 25 to 35%.
The base rate is remarkable. China revenue went from around $20 million in 2021 to an expected $178 million to $193 million in 2026, a compound growth rate north of 61%. Historically the company has grown 50%-plus there, so on paper the 25 to 35% guide looks like a deceleration. But that’s simply the math of a bigger base. They have barely scratched the surface of that market, and China is unmistakably the main trajectory for the business. If you buy Jamieson, accelerating growth in China has to be central to your thesis, with the US, thanks to Youtheory, as the secondary driver.
Putting the 2026 guidance together: total revenue up 13.7% at the high end, Canada up 4 to 6%, the US up 14 to 19%, China up 25 to 35%, and the rest of international up 10 to 15%. Adjusted EBITDA is guided up to 13.4% with margins roughly flat, and earnings are guided to grow 12.5 to 19.5%. It’s genuinely rare to find a defensive business growing earnings at that pace. Remember, people don’t cut vitamins out of the budget when money gets tight. They’re cheap, and they’re habitual. The one wrinkle was the COVID era, when a vitamin buying frenzy pulled earnings forward and forced a period of consolidation afterward, but the underlying demand is about as steady as it gets.
Valuation
On a trailing basis, Jamieson trades around 23 times earnings, though remember those earnings are depressed by the Youtheory interest drag. On a forward basis, with earnings set to grow faster than they have in years, you get to a more attractive 18.2 times. That’s not dirt cheap, but for the growth you’re getting, I think it’s fair. The earnings yield sits around 5.5%, which in this market is nothing to sneeze at. Forward price to free cash flow runs closer to 23 times, so you are paying up a bit for a quality compounder, but not egregiously.
The bottom line
Is Jamieson a flashy AI name that’s going to grow 40 or 50% a year? No. But look hard at what you pay for those companies. Then look at a defensive small cap growing earnings 12 to 19% next year, trading around 18 times forward earnings, throwing off a fast-growing and well-covered dividend, and carrying a live takeover offer on top of it all.
If a deal closes at, say, $50 a share over the next year, that’s about 25% upside plus the dividends you collect along the way. Is the S&P 500 or the TSX going to hand you 25% over that stretch? Probably not. And if the deal falls through, you’re left owning a steady, growing, cash-generative business at a reasonable price. That’s the kind of risk-reward I like. The debt is the one thing I’d want to see improve, but with EBITDA growing into it, that story is already getting better.
This is the sort of overlooked Canadian small cap that gets perpetually mispriced, right up until someone comes along and pays a premium to take it off the market. I think Jamieson is a good business at a good price, and the buyout offer is the free option on top.
