Big Payday For NBTY Owner Carlyle Group

The Carlyle Group is taking a $672 dividend from NBTY, which makes vitamins and nutritional supplements.

Ronkonkoma, N.Y.-based NBTY said its parent company, Alphabet Holding Co., plans to issue and sell $500 million in notes. NBTY said it expects to use proceeds from the notes, plus cash on hand, to pay a cash dividend to shareholders of about $672 million. Standard & Poor’s said NBTY is kicking in $200 million in cash to fund the nearly $700 million dividend.

The dividend should make the Carlyle Group happy. The Washington D.C. buyout shop acquired NBTY for about $4 billion in October 2010. Carlyle Group invested $1.55 billion equity in the deal, according to NBTY’s 2010 annual report. The firm owns “substantially all” of NBTY’s equity securities, the annual report says. With the $672 million dividend, Carlyle Group is making back about 44 percent of its investment.

NBTY offers over 22,000 products, including vitamins under the Nature’s Bounty brand, Solgar and GNC.

“NBTY’s customer concentration is, in our view, a risk, as is its exposure to the pressured private-label environment, which currently accounts for over one-fifth of total sales,” said Nalini Saxena, a Standard & Poor’s credit analyst. “However, we expect the company to continue to benefit from its strong market position in its top two markets, the U.S. and the U.K.”

Officials for Carlyle and NBTY couldn’t immediately be reached for a comment.