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GNC goes public (third time lucky)

By Elaine Watson , 04-Apr-2011

The parent company of General Nutrition Centers (GNC) Inc has begun trading on the New York Stock Exchange, joining rival Vitamin Shoppe, which went public in late 2009.

The offering of 16m shares by the company and 9.875m shares by the selling stockholders (which includes 3.375m shares subject to the underwriters' overallotment option – which they have exercised in full) will close on April 6.

The proceeds will be used to pay down debt among other things.

The Pittsburgh-based nutrition and dietary supplements giant, which has more than 5,600 stores in the US and 1,600+ overseas, is owned by the Ontario Teachers Pension Plan (a Canadian institutional investor that administers teachers' retirement funds) and Los Angeles-based private investment partnership Ares Management.

However, the two will still retain a significant proportion of its common stock and heavy influence over its decision-making process following the offering.

Third attempt at IPO

The partnership purchased GNC's parent company in 2007 from private equity firm Apollo Management, which bought it from Royal Numico in 2003 for $750m.

Apollo attempted to take GNC public shortly after the acquisition, but decided against the move after a downturn in the supplements industry. Its second abortive attempt came in 2006.

Net profit at GNC surged 56.3 percent to $19.8m in the fourth quarter of 2010 compared with the same period in 2009, while sales were up 7.9 percent to $435.7m. For the year to December 31, 2010, it notched up a 41 percent hike in net profits to $98.2m on sales up 6.8 percent to $1.82bn.