CCMP Capital Advisors earned 3x its investment in Jamieson Wellness following the vitamin maker’s recent initial public offering, two sources with knowledge of the matter told PE Hub Canada.
Jamieson wrapped up its IPO on the Toronto Stock Exchange last month, raising more than $345 million, including the greenshoe option. Of these proceeds, about $100 million went to CCMP and other selling shareholders.
Another part of CCMP’s realization came from a series of transactions that reorganized the company’s capital prior to the IPO’s close. In the prospectus, Jamieson said it would use the bulk of its $245 million in treasury proceeds to make debt, dividend and other payments to CCMP linked to the capital change.
CCMP, which controlled Jamieson before the IPO, reduced its stake to about 39.7 percent with its completion.
CCMP declined to comment.
Jamieson’s IPO comes roughly 3 1/2 years after it was acquired by CCMP.
The Windsor, Ontario, company was then a 92-year old Margolis-family-owned maker of vitamins, minerals and supplements. It was looking to manage a succession event and expand its horizons with the help of a compatible strategic or private equity partner.
The company found this in CCMP. Jamieson agreed to partner with the New York firm because of its experience investing in the consumer-retail sector, Managing Directors Joseph Scharfenberger and Richard Zannino told PE Hub Canada. The $300 million deal was struck in January 2014.
CCMP Managing Director Doug Cahill became Jamieson’s chairman and began directing a new growth agenda. It focused on reinforcing the company’s already strong presence in Canada’s VMS market and greatly increasing its “global footprint,” Zannino said.
Key elements of the strategy included diversifying the company’s product line, getting into new areas, and targeting markets of high and intensifying VMS demand, such as China. Attention was also paid to creating operational efficiencies, such as better-priced sourcing and improvements in production, Zannino said.
CCMP also made changes to top management. They included the hire of Mark Hornick, a consumer-industry executive, who became president and CEO in June 2014.
Some of Jamieson’s goals were achieved through acquisitions, such as women’s natural health brand Lorna Vanderhaeghe Health Solutions, bought in 2014. Additionally, Body Plus and Sonoma, a distributor of sports nutrition and wellness brands, was picked up earlier this year for $91 million.
Scharfenberger says these add-ons accelerated Jamieson’s expansion by “putting the company into the specialty channel.”
The result of the combined initiatives was growth in Jamieson’s revenue at a compounded annual rate of 8.7 percent since 2014, well ahead of growth in the overall VMS market, and a doubling of international sales.
By 2016 CCMP felt it “had completed what we set out to do with Jamieson,” Zannino said.
The investor decided to sell and reportedly tapped investment banks Houlihan Lokey and Nomura to explore opportunities among strategic buyers. The likely selling price was US$600 million to US$700 million, the report said.
CCMP was already receiving lots of inbound calls from potential buyers, including from China, Zannino said. In the end, it went the public-market route. “The timing was right and it was our view that the Toronto Stock Exchange was the best home for Jamieson,” he said.
Scharfenberger and Zannino say Jamieson is positioned for further growth by building on the strategy put in place over 2014-2016. The company, which reported pro-forma revenue of $297 million last year, is now shooting for revenue of $390 million to $410 million, an increase of 31 percent to 38 percent, by 2021.
Jamieson was the debut investment of CCMP’s third mid-market fund. With the IPO’s completion, it is also the first exit of CCMP Capital Investors III, which raised US$3.6 billion in 2014.
Canada Pension Plan Investment Board is one of Fund III’s limited partners. The pension fund also helped finance CCMP’s acquisition of Jamieson.
Photo courtesy of Valentina_G/iStock/Getty Images
Photos of Joseph Scharfenberger and Richard Zannino courtesy of CCMP Capital Advisors