New management team to reinvigorate UAS Labs brands, R&D as part of acquisition

14-Apr-2013 - Last updated on 15-Apr-2013 at 16:36 GMT

Related tags Uas labs Food and drug administration

Lakeview Equity Partners, a Milwaukee-based investment firm, has taken its first dip into the human nutrition pool with the acquisition of probiotics supplier and finished goods manufacturer UAS Labs.

In the deal, whose financial details were not disclosed, Lakeview will install new leadership at UAS. As partners in the transaction, Kevin Mehring will serve as the new president of UAS Labs and Greg Leyer, PhD, will serve as the chief scientific officer. Mehring was previously the director of sales in the Americas of dietary supplements and pharmaceuticals for DuPont Nutrition & Health, formerly Danisco. Leyer was the director of global business development there. UAS Labs founder Dr. S.K. Dash will stay on as chairman and director of new business development.

Strong partners, strong fundamentals

“We have had a strong interest in specialty food. What really attracted us to this opportunity is the people were are getting to partner with,” Joe Cesarz, managing director of Lakeview, told NutraIngredients-USA.

“The underlying market fundamentals of the probiotics portion of the dietary supplements realm are extremely compelling. And the opportunity to work with these two individuals, Kevin Mehring and Greg Leyer,” Cesarz said. Cesarz and Mehring actually have a relationship extending back to their high school days in Milwaukee.

“Based on the research we looked at when evaluating the deal it seems as if probiotics are on the pace to grow in the high teens,” Cesarz said. Because of booming demand, UAS had tripled its production capacity in 2012.

UAS will remain focused on the US health food retail channel, and the plan is to update the marketing of the finished products, Lakeview said.

“Our management partners, Kevin Mehring and Greg Leyer, both have immense market knowledge, technical knowledge and relationships. We view UAS as a great brand name with legacy attributes of research and development and products with good science behind them. But it certainly could use some of the assistance that our new partners can bring to the business in terms enhanced, refreshed marketing and accelerated R&D programs.

So we really thought the legacy attributes of the company and the skill set of the new partners were a great fit,” Cesarz said.

Regulatory compliance as an asset

UAS Labs has had run ins with federal regulators in the past. In June 2011, FDA took the unusual measure of seizing products over illegal drug claims on the labels (claims that also appeared on the company’s web site). The illegal disease claims were first mentioned in a warning letter in 2005, after which UAS “promised it fully correct the violations,” according to FDA. The illegal claims were mentioned again in inspections in 2007 and in March 2011.

Cesarz said Lakeview was aware of the past compliance issues and said the new partners take regulatory compliance very seriously.

“We view regulatory compliance is not just something we need to have but also as an asset. It’s our intention to do better both on claims end and in the manufacturing facility.

“Everybody in the industry is aware that the regulatory environment is continuing to expand and progress and the nutritional supplements space has the eye of FDA right now. It’s not just something that you do to be compliant; regulatory compliance has to be an asset for the company and it will help us against our competition,” he said.

UAS is headquartered in Edina, MN and has a production facility in the northern Wisconsin city of Wausau. Cesarz said the plan is to keep both facilities.

Greyrock Capital Group of Chicago also partnered in the deal.