Avista picks up OTC drug developer Wellspring from Audax

‘The diversified and highly established nature of WellSpring’s product portfolio, coupled with a strong innovation pipeline and exciting growth opportunities in e-commerce, was very compelling,’ said Avista’s Yu.

Avista Capital Partners will announce later this morning that the New York-based firm has acquired WellSpring Consumer Healthcare, a developer and marketer of over-the-counter and personal care brands, from Audax Private Equity.

Transaction terms were not disclosed. The deal is the first investment from Avista Healthcare Partners VI, which held a first close in May 2022. Avista said it will look to leverage its expertise and resources to accelerate WellSpring’s growth trajectory for the benefit of all stakeholders.

“The diversified and highly established nature of WellSpring’s product portfolio, coupled with a strong innovation pipeline and exciting growth opportunities in e-commerce, was very compelling,” Alex Yu, partner at Avista, told PE Hub.

Founded in 1999 and based in Sarasota, Florida, WellSpring develops and markets a diversified portfolio of OTC brands in the US and Canada, with several that enjoy high market shares. Some of the brands include Bactine (first aid), Bonine (motion sickness), Emetrol (anti-nausea) and Glaxal Base (therapeutic skincare).

Yu said the WellSpring deal will be a platform investment, the latest in the consumer health space that Avista has invested in.

Avista has invested in and built several successful platforms in the consumer healthcare sector, including: Arcadia Consumer Healthcare, a North American marketer of premium vitamin and nutritional supplements and OTC medicines, in 2018; Cooper Consumer Health, a European independent OTC drug manufacturer and distributor, in 2021; Trimb Healthcare, a Sweden-based consumer healthcare platform focused on the development, sales and marketing of OTC medicines and other consumer healthcare products, in 2015; and Vision Healthcare, a fast-growing, European digitally-focused omni-channel consumer healthcare platform, in 2021.

Arcadia Consumer Healthcare was sold to Bansk Group in September 2021 and Trimb was sold to Karo Pharma in September 2019. In 2018, Avista acquired Arcadia’s predecessor, Kramer Laboratories. Shortly thereafter, Avista helped lead a comprehensive re-branding and re-launch to create Arcadia – now a platform of consumer healthcare products, including premium vitamin and nutritional supplements, and OTC medicines in the therapeutic hair care, foot care, digestive health and specialty cough categories.

While the firm would not comment specifically about the growth and scale plans for the company during its hold period, Yu said to look at Avista’s prior ownership of Arcadia as a guide.

“Arcadia was a recognized leader in the consumer healthcare market for OTC medicines, premium vitamins and nutritional supplements before we got onboard,” Yu said. “During Avista’s ownership Arcadia made three significant add-on acquisitions (Nizoral, Kaopectate and Naturello) – so the firm has previously built a successful OTC platform and it will likely follow this blueprint for Wellspring.”