Private equity firm Bruckmann Rosser Sherrill & Co. completed its sale of Seroyal to Atrium Innovations Inc. Seroyal sells nutritional supplements under the Genestra and Pharmax brands. The sale was the first exit for BRS Fund III, netting a gross IRR of approximately 77 percent.
NEW YORK, January 4, 2011 — Bruckmann, Rosser, Sherrill & Co. (BRS), a New York-based private equity firm, announced today that it successfully sold the assets of Seroyal Holdings L.P. (“Seroyal” or the “Company”) to Atrium Innovations Inc. (“Atrium”). Seroyal, headquartered in Richmond Hill, Ontario, sells branded nutritional supplements and homeopathic remedies to health care practitioners in Canada and the U.S. The Company sells nutritional supplements under its proprietary Genestra and Pharmax brands and homeopathic remedies manufactured by Unda SA of Belgium (under the Unda brand) through exclusive distributorship agreements for Canada and the U.S. Atrium (TSX: ATB), based in Quebec City, Quebec, is a leading developer, manufacturer and marketer of professionally endorsed, science-based dietary supplements for the health and nutrition industry.
BRS acquired Seroyal in 2004 through its second institutional fund (“BRS Fund II”) from the Company’s founder Rosetta Raso, who maintained a significant minority stake. In 2009, BRS made a follow-on investment through its current fund (“BRS Fund III”) to finance the acquisition of Pharmax LLC, a competitor based in Redmond, Washington. The proceeds from the sale of Seroyal and from an earlier recapitalization represented a gross multiple of invested capital of approximately 2.6x for both funds. In addition, the sale represented the first exit for BRS Fund III, generating a gross IRR of approximately 77%. BRS was advised in the transaction by BMO Capital Markets.
“We are pleased with the outcome of the Seroyal transaction,” said Stephen Sherrill, Managing Director and Co-Founder of BRS. “Prior to acquiring Seroyal, we identified the nutritional industry as an attractive space with strong long-term growth potential. We chose to invest in Seroyal due to its number-one position in the Canadian health care practitioner market and its growing presence in the U.S. We built a management team, acquired a brand marketed by one of Seroyal’s suppliers and entered a new retail channel through a joint venture. All in all, Seroyal performed superbly under our ownership, growing even through the recession. We will continue to seek investment opportunities in the health and nutrition industry as we believe it continues to represent an attractive space.”
“The sale to Atrium is a positive outcome for Seroyal and its customers,” said Carmen Fortino, the CEO of Seroyal. “BRS was an excellent partner who provided guidance and capital to support the Company’s growth initiatives while remaining true to Seroyal’s core values. We now look forward to working with Atrium, which is a logical partner for Seroyal given its focus on professionally endorsed supplements and in-depth knowledge of Seroyal’s market.”
BRS is a New York based private equity firm with $1.4 billion of committed capital under management in three investment partnerships, focused on investing in middle market consumer goods and services businesses. Since 1996, BRS has purchased over 40 portfolio companies for aggregate consideration of over $6.4 billion. In addition, BRS portfolio companies have completed approximately $1.9 billion of add-on acquisitions. Prior to forming the firm, the founders of BRS were in the financial acquisition business at Citicorp Venture Capital where they closed 25 transactions with aggregate transaction values totaling $5.8 billion.