IdeaSphere Looks to Build Mass Retail Presence With Metabolife Purchase

Twinlab ownerIdeaSphere (ISI) sees its potential Metabolife acquisition as a means to increase its dietary supplement presence in the mass market.

The Grand Rapids, Mich.-based firm announced the $23.5 mil. purchase July 1, the day after Metabolife International and manufacturing subsidiary Alpine Health Products filed for Chapter 11 bankruptcy protection in Southern California district court.

ISI is looking to acquire "core non-ephedra brands" such as Metabolife Ultra , Metabolife Complete , Metabolife Ultra Caffeine Free and Metabolife Green Tea Formula . However, Metabolife's assets will not be auctioned officially until September.

Retailers that stock Metabolife products include Wal-Mart, Kmart, CVS and RiteAid. Twinlab currently is available only in health and natural food stores.

Metabolife's Alpine holdings include a laboratory and manufacturing facility in Orem, Utah. ISI also stands to acquire a Memphis, Tenn. distribution center.

ISI bought Twinlab's assets for $65 mil. within a week of the dietary supplement manufacturer's 2003 bankruptcy filing (¹ (Also see "Twinlab Sells Assets To IdeaSphere, Files For Protection From Creditors" - Pink Sheet, 8 Sep, 2003.), p. 14).

The four-year-old company also owns the Nature's Herbs and Alvita Teas brands, as well as Rebus Publishing.

In line with ISI's "brand management" business model, the Alpine lab and processing facilities will be used for new product development across the company's portfolio.

The Utah facility, located near the Twinlab plant, "will increase ISI's production capacity by billions of dose forms of tablets and powders," the firm said.

In addition, the Memphis facility will serve as a central distribution center for all ISI-owned brands.

The acquisition "fits with our ongoing strategic initiative to streamline operations and create efficiencies with shared services," ISI asserts.

Metabolife's strong brand recognition in Asia is another asset that attracted ISI's attention.

ISI's planned entry into the Asian market will be spearheaded later this year by motivational speaker Tony Robbins, an owner and vice president of ISI.

"Robbins will be developing complimentary motivational programs to leverage Metabolife in Asia, creating a broad platform on which to expand the entire ISI health and wellness offerings in Asia, including China and India," President and COO Mark Fox stated.

Distribution opportunities through ISI-cultivated relationships in Asia also will facilitate the process, the company said.

"We were able to offer a premium bid for these assets because they can be leveraged very efficiently within our existing structure and immediately integrated with our current operations," Fox explained.

ISI's business plan ultimately calls for the formation of four operating groups: ISI Nutritionals, ISI Publishing, ISI Innovations and a planned ISI Fitness unit.

ISI Innovations has worked with companies such as Reebok and Wild Oats on brand line extensions and redesigns.

Last month, ISI also entered into a revised partnership with New Zealand-based biotech dairy firm A2.

The company's A2 Milk is "naturally produced to contain maximum amounts of milk protein variant," the firm claims. ISI will oversee the licensing, production and marketing of the product in North America, the firm stated June 29.

The product will be introduced at Natural Products Expo East Tradeshow in September and should be available in U.S. stores this fall.

ISI plans to "pursue other new ventures in the coming months through strategic acquisitions, partnerships and organic innovation," Fox reiterated. The aim is to develop "a portfolio of market leading brands across multiple wellness industry segments that allows consumers a trusted entry point by user level, by need, or by brand orientation."