Carlyle’s $3.8-bn NBTY deal is year’s largest LBO
16 Jul 2010
US-based Carlyle Group, the world's largest private equity firm, yesterday made one of the largest leveraged buyouts of the year by offering to buy NBTY, a maker of vitamins and nutritional supplements, for $3.8 billion in cash.
The proposed acquisition of NBTY by Carlyle is the biggest leveraged buyouts since TPG Capital and Canada Pension Fund bought IMS Health Inc. for $5.2 billion in November 2010. (See: Buy out firms TPG, CPP to acquire IMS Health for $5.2 billion) and comes a week after it and Welsh, Carson, Anderson & Stowe agreed to sell medical-care provider Multiplan Inc for $3.1 billion to BC Partners and Silver Lake Partners. (See: Carlyle to sell MultiPlan to BC and Silver Lake for $3.1 billion)
Under the deal, NBTY shareholders will receive $55 in cash for each share they own, placing the total value of the transaction at approximately $3.8 billion. The price represents a premium of nearly 47 per cent to NBTY's yesterday closing share price of $37.47.
Carlyle, with $90.5 billion of assets under management, will finance the acquisition with equity from its Carlyle Partners V fund and debt provided by Bank of America Merrill Lynch, Barclays Capital and Credit Suisse.
New York-based NBTY, founded in 1971, and earlier known as Nature's Bounty, Inc,. is a leading global vertically integrated manufacturer, marketer and distributor of a broad line of nutritional supplements in the US and globally.
Under a number of NBTY and third party brands, the company markets over 22,000 products like Nature's Bounty, Ester-C, Solgar, MET-Rx, American Health, Osteo Bi-Flex, Flex-A-Min, SISU, Knox and Sundown, among others.
The company also sells its products through mail order catalogue and the internet. It operates 442 Vitamin World stores in the US, 86 Le Naturiste stores in Canada; 537 Holland and Barrett stores in Europe, 351 Julian Graves stores and 31 GNC (UK) stores in the UK and about 113 stores in the Netherlands, Ireland and South Africa.
NBTY employs 14,000 and had 2009 revenue of $2.6 billion. About 60 per cent of its revenue comes from selling its products to retailers like Wal-Mart, Wallgreens, CVS, Eckerd Drugs, and Target.
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