When Tolworthy took over Twinlab in 2011, the iconic supplement brand was in a recovery mode from its bankruptcy filing in 2003. Now, with the company growing strongly, Tolworthy is looking at the next phase in the company’s lifecycle, engineering a management buyout so that he can more tightly focus on executing a growth and acquisition strategy.
“This creates a new generation for a 46-year-old company. Twinlab hasn’t changed with the market. This new structure will bring new relevance to the company,” Tolworthy told NutraIngredients-USA.
Breaking out of the brand lock
Twinlab has a long history, with a start in protein powders for sports nutrition. The company was one of the first big brands in the supplement space that grew from those roots as opposed to multivitamins, and it enjoyed outsized success with brands such as Metabolife, Twinlab, Nature’s Herbs and Alvita teas before falling on hard times in the early 2000s. The company became known for a bewildering array of products.
“Twinlab grew up in a world where products were brand locked. The goal was to have one of everything. You started out with this much shelf space, and you wanted to end up with this much,” Tolworthy said, stretching his arms wide.
And Tolworthy knows about the fight for shelf space. As the former chief executive of Vitmain Shoppe, he helped the company boost its store footprint from 80 outlets to 500 during his six-year tenure at the helm. He is also a director at Vitamin Angels, a non-profit organization that donates vitamins for use in developing areas and countries.
“I believe in this industry. What I want to do as we build is to come up with an organization that serves the core of the industry,” Tolworthy said.
Tolworthy said the key in the new strucutre will be the control that he and his team will exert. Being private means the company can pursue a strategy that is focused on longer-term goals, rather than to be a slave to the quarterly and year-end financial reports.
On the other hand, private equity ownership all too often results in a short-term outlook all its own. These type of investors are rarely looking to buy houses to live in them, so to speak.
“They are not trying to create a wonderful company,” he said.
Tolworthy, as he negotiates the new structure of Twinlab, said he is seeking investors who share his vision for Twinlab’s near and long-term future.
“I know how to make money and I’ve proven I know how to make money for other people,” he said. “But I want to create a situation where this is not just a financial transaction.”
Tolworthy’s reputation precedes him
Capstone Financial Group is acting as an advisor in the effort to raise $130 million in capital to help build the new Twinlab. This will include some assests of the old Twinlab and three strategic acquistions. George Schneider, president and chief investment officer of Capstone, said one of the chief considerations of the deal was Tolworthy himself. His reputation for turning around companies and positioning them for future success is unparalleled, Schneider said.
“The turnaround that Tom Tolworthy and his team have accomplished is nothing short of astounding. They have reduced debt, they have rebranded, they have launched new products. It is in keeping with his past experience at Barnes and Noble and Vitamin Shoppe,” Schneider said.
Schneider said Tolworthy and his team had rebuilt Twinlab into a powerhouse with significant operational strengths, including distribution in 45,000 retail locations in 55 countries and a lengthy, yet focused, product mix. Under Tolworthy, Twinlab engaged in more successful and sophisticated marketing campaigns and launched a “clean” sports nutrition line that now features Solazyme’s new algal protein, among other innovative ingredients.
Tolworthy said many Twinlab employees had shown remarkable loyalty to the company even through its tumultous periods. That’s something he wanted to be in a position to reward.
“I want to be in a position to make decisions that are better for the company and for the poeple the business supports. I bring that aspect of company culture of Twinlab with me,” Tolworthy said. “There is no replacement for employee involvement.”
As for future targets of acquisition, Tolworthy said he has some very specific ideas, though he couldn’t for obvious reasons name specific companies.
“We will be looking for emerging science and emerging trends. For example, probiotics and gut health; that’s huge and that’s not an area where Twinlab plays,” Tolworthy said.