HGGC has completed the acquisition of publicly-traded Nutraceutical International at an enterprise value of $446 million. The transaction was originally announced on May 22, 2017, and was approved by Nutraceutical’s shareholders on August 21, 2017.
Nutraceutical (NASDAQ: NUTR) is a manufacturer, marketer, distributor and retailer of more than 7,500 SKUs of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores. The company’s products are sold under numerous brands including Solaray, KAL, Dynamic Health, Nature’s Life, LifeTime, Natural Balance, and many others.
The company also owns neighborhood natural food markets, which operate under the trade names The Real Food Company, Thom’s Natural Foods, Cornucopia Community Market and Granola’s. Nutraceutical also owns health food stores, which operate under the trade name Fresh Vitamins. Nutraceutical is based in Park City, UT (www.nutraceutical.com).
For the fiscal year ending September 30, 2016 Nutraceutical had revenues of $235 million and EBITDA of $43 million. “We are excited to complete our investment in this great company, and we look forward to working with the Nutraceutical team in its next phase of growth and evolution,” said Les Brown, Managing Director and COO of HGGC. “We are confident there is a tremendous opportunity for the company to continue to build on its strong market position and to bring more great products to its loyal customers.”
Nutraceutical is a former Bain Capital portfolio company that was taken public in 1998. With the closing of the transaction, Nutraceutical founder, Chairman and CEO, Frank “Bill” Gay II announced his retirement after leading the company for nearly 25 years. “We are pleased to close this transaction, which delivers significant value to our stockholders, many of whom have been with us since our initial IPO in 1998,” said Mr. Gay.
The new CEO of Nutraceutical is Chad Clawson who served as Nutraceutical’s President of Manufacturing and Distribution from 1999 to 2005. He comes to Nutraceutical from Service Experts, one of the largest HVAC equipment and service providers in North America, where he held the position of Chief Officer of Operational Excellence. Service Experts was acquired by American Capital and management from Lennox in 2013 and was sold in 2016 to Enercare, a publicly-traded provider of home and commercial services based near Toronto. Earlier in his career Mr. Clawson was a Principal with American Capital and a Managing Director with Apex Growth Partners.
“We have endless appreciation for what Bill Gay has accomplished with Nutraceutical, not only building an incredible company, but also truly helping to shape and professionalize the natural products industry,” said Steve Young, Co-Founder and Managing Director of HGGC. “HGGC and Chad are committed to upholding the high standard Bill has set, and we wish him the best for a well-deserved retirement.”
HGGC (formerly Huntsman Gay Global Capital) makes leveraged buyout, recapitalizations and growth equity investments in middle market companies. The firm invests from $25 million to $100 million of equity per transaction in companies that have revenues of $100 million or more, enterprise values of $100 million to $500 million, and EBITDA of $15 million or more. In December 2016, HGGC closed its third fund, HGGC Fund III, LP, with total capital commitments of $1.8 billion, surpassing the Fund III target of $1.5 billion and reaching the $1.75 billion hard cap, exclusive of the general partner’s capital commitment. HGGC is based in Palo Alto (www.hggc.com).
© 2017 Private Equity Professional | August 24, 2017