Nutraceutical International expanding East Coast presence with Action Labs buy.
This article was originally published in The Tan Sheet
Executive Summary
NUTRACEUTICAL INTERNATIONAL EXPANDING EASTERN U.S. MARKET PRESENCE with the acquisition of Action Labs for approximately $13.7 mil. in cash. Nutraceutical International announced its purchase of the Long Island, N.Y. dietary supplement marketer July 21. Action Labs markets over 65 branded specialty supplements through health food stores, with a concentration in the eastern U.S., and has annual sales of approximately $8 mil.
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NUTRACEUTICAL INTERNATIONAL EXPANDING EASTERN U.S. MARKET PRESENCE with the acquisition of Action Labs for approximately $13.7 mil. in cash. Nutraceutical International announced its purchase of the Long Island, N.Y. dietary supplement marketer July 21. Action Labs markets over 65 branded specialty supplements through health food stores, with a concentration in the eastern U.S., and has annual sales of approximately $8 mil. The Action Labs product line includes the Yohimbe PowerMax 2000, Action for Men sports supplements and Fat Burning Formulas weight control products, as well as such nutritional supplements as ginkgo biloba, St. John's wort and saw palmetto. The 10- year-old company markets its products through distributors. The acquisition does not include Action's USA Nutritionals division, a relatively small business in mass market outlets. Headquartered in Park City, Utah, Nutraceutical International markets dietary supplements to health food stores on a national basis. The company describes itself as one of the nation's largest manufacturers and marketers of branded products sold directly to health food stores. Brands include Solaray, KAL, NaturalMax, VegLife, Premier One and Solar Green. The company also markets products internationally and manufactures bulk formulations on a contract basis. The acquisition is Nutraceutical's fifth since it was formed in 1993 by the investment firm Bain Capital and the company's senior management to employ a "consolidation strategy" in the highly fragmented vitamin, mineral and herbal supplements industry. Since its formation, Nutraceutical has completed the purchase of Solaray, Premier One, KAL and Monarch Nutritional Labs, a raw material supplier. The company's sales for the third quarter ended June 30 were flat at $25 mil. (up .8%) and net income rose 6.3% to $1.7 mil. Sales for the nine months increased nearly 9% to $78.7 mil. Nutraceutical noted its revenues were in line with management targets and reflected the "continued strong relationships our sales force has with health food retailers." Selling, general & administrative expenses were up 7.4% to $7.3 mil., due to costs associated with the "proactive" implementation of new packaging designs that comply with FDA final rules published in September 1997 ("The Tan Sheet" Sept. 23, 1997, pp. 1-7). The rules, which establish the format and terms to be used in labeling, including use of a "Supplement Facts" panel, become effective March 23, 1999. |