MBF Healthcare sells FDC Vitamins to Vitamin Shoppe for about $85 mln

Vitamin Shoppe said Monday that it has acquired FDC Vitamins (which is doing business as Nutri-Force) for about $85 million. MBF Healthcare Partners was one of the sellers. Stifel provided financial advice to the Vitamin Shoppe while Houlihan Lokey was financial advisor to Nutri-Force. Based in Miami Lakes, Florida, FDC Vitamins is a maker of vitamins, minerals and supplements.


NORTH BERGEN, N.J., June 9, 2014 /PRNewswire/ — Vitamin Shoppe, Inc. (the “Company”) a leading multi-channel specialty retailer of nutritional products, today announced that it has purchased FDC Vitamins, LLC, doing business as Nutri-Force Nutrition (“Nutri-Force”) a contract manufacturer of vitamins, minerals and supplements (VMS) from MBF Healthcare Partners, L.P. and other minority holders. Nutri-Force is a current manufacturer for the Company as well as for other domestic and international customers and distributors.
The transaction was structured as a purchase of FDC Vitamins, LLC equity by a wholly-owned subsidiary of the Vitamin Shoppe. The purchase price is approximately $85 million which includes a $5 million earn out based on 2014 financial performance. The purchase price will be paid with available cash. The acquisition of Nutri-Force is expected to be neutral to slightly accretive to 2014 earnings per share, excluding transaction and integration costs.
Commenting on the transaction, Tony Truesdale, the Vitamin Shoppe’s CEO stated, “I am very pleased to announce plans to expand our sourcing capabilities with the strategic acquisition of Nutri-Force. The company is attractive to us for a number of key reasons that fit with our long-term needs and include: a high-quality management team, product development expertise and capability, and the ability to produce and ship from one facility four key form factors – soft gels, tablets, powders and capsules. Furthermore, Nutri-Force is an industry leading contract manufacturer with thriving partnerships that we intend to fully support.”
Mr. Truesdale further commented, “Being vertically integrated is strategically important for the Vitamin Shoppe with benefits including, international product registrations, increased speed to market with new products, earlier visibility into new product trends and control over our product formulations. We will continue to rely on existing trusted contract manufacturers in order to mitigate the risk of single-source supply.”
Anthony Alfonso, President, Founder and CEO of Nutri-Force stated, “I am thrilled that the next phase of Nutri-Force’s growth will be combined with the Vitamin Shoppe. As part of the Vitamin Shoppe family, Nutri-Force will be thoughtful and disciplined as it grows the business while at the same time leveraging the strengths and scale of the Vitamin Shoppe.”
Reflecting this transaction, and subject to finalization of purchase accounting, the Vitamin Shoppe has updated the following items from its previously issued 2014 Outlook and expects the following:
Depreciation and amortization of approximately $33 million
EBIT margin decline between 50 to 100 basis points year over year
Stifel is acting as financial advisor to the Vitamin Shoppe and K&L Gates, LLP is serving as legal counsel. Houlihan Lokey acted as financial advisor to Nutri-Force and Holland & Knight LLP
About the Vitamin Shoppe, Inc. (NYSE: VSI)
Vitamin Shoppe is a leading multi-channel specialty retailer of nutritional products based in North Bergen, New Jersey. In its stores and on its website, the company carries one of the most comprehensive retail assortments in the industry, including vitamins, minerals, specialty supplements, herbs, sports nutrition, homeopathic remedies, green living products, and beauty aids. In addition to offering 900 national brand products, the Vitamin Shoppe also exclusively carries products under The Vitamin Shoppe®, BodyTech®, True Athlete®, My Trition®, plnt™, ProBioCare™ and Next Step™ brands. The Vitamin Shoppe conducts business through more than 660 company-operated retail stores under The Vitamin Shoppe, Super Supplements and Vitapath retail banners, and primarily through its website, www.VitaminShoppe.com and www.supersup.com. Follow The Vitamin Shoppe on Facebook at http://www.facebook.com/THEVITAMINSHOPPE and on Twitter at http://twitter.com/VitaminShoppe.
About FDC Vitamins, LLC
Headquartered in Miami Lakes, Florida; FDC Vitamins, LLC provides custom manufacturing, private label and re-packaging services within its 215,000 square foot cGMP certified facility. The company has been a successful leader in the production of private label nutritional supplements and vitamins as well as developing and marketing products under its own labels Nutri-Force Sports and Betancourt. The company has expertise in production of soft gels, tablets, powders and capsules. FDC Vitamins, LLC also works closely with its customers in developing and manufacturing new products.