Twinlab rounds last bend in restructuring marathon with acquisition of Reserveage supplement line

By Hank Schultz contact

- Last updated on GMT

Tom Tolworthy, CEO of Twinlab, talking to NutraIngredients-USA at SupplySide West 2014
Tom Tolworthy, CEO of Twinlab, talking to NutraIngredients-USA at SupplySide West 2014

Related tags: Mergers and acquisitions

Twinlab Consolidated Holdings LLC has competed the last lap of a journey that began when CEO Tom Tolworthy took the reins of the previous version of Twinlab in 2011. The plan has now come to full fruition with the impending acquisition of Organic Holdings LLC, distributor of the nutritional supplement brand, Reserveage Nutrition.

Twinlab Consolidated Holdings is the company formed to acquire the assets of Twinlab when Tolworthy started the process of a management buyout in early 2014.  The company subsequently went public in a reverse merger in late 2014, during which time Tolworthy was able to convince the holders of the company’s debt to sequester it to allow the new entity the widest room to maneuver and grow, reasoning that this was the best chance for them to recoup their investment.  When Tolworthy became CEO in 2011, the company was limping along after a bankruptcy in 2003. 

Plan fulfilled

When the blueprint to reform the company was unveiled, Tolworthy announced a plan to acquire two unnamed companies. Both of those deals have have been realized when the Reserveage deal closes, as expected, on Oct. 2, Tolworthy said. 

“At the time we acquired Twinlab and did the reverse merger, we purchased the options to purchase two companies. One of those was (contract manufacturer) Nutricap Labs. The other was Organic Holdings, owners of the Reserveage brand name,” ​Tolworthy told NutraIngredients-USA.

Reserveage offers a wide array of mostly herbal and botanical-based supplements in healthy aging, beauty from within and other categories. CEO Naomi Whittel founded the brand on the health and wellness potential of red wine grapes and spread out from there.

Filling in the brand portfolio

“Synergy” is a term frequently bandied about during acquisition time. Often it is used to reassure investors and shareholders that the acquiring firm is not spending its disposable cash merely to fill up an available space in the garage, so to speak. Bigger isn’t always better, and sometimes poorly thought out acquisitions soak up more in integration costs than they add to the bottom line.

That isn’t the case with Twinlab, Tolworthy said. He had a vision for the company from the start of the process, and Organic Holdings was part of that vision. The old Twinlab was known for having acquired a bewildering array of brands, including Metabolife, Alvita teas and Nature’s Herbs. Part of Tolworthy’s early work with the company was to pare that down and refocus on brands built for specific channels.

Now comes the time to re-expand the company, but to do so, Tolworthy said he wanted to keep a keen focus on which brands function best in certain channels.  The old days of filling up empty spaces in the garage won’t return, he said.

“Part of our business plan was not to acquire more of the kind of products we already make but to expand our portfolio. They market products we don’t currently make and they offer distribution channels we don’t have.  We are strong in the natural channel, but they sell direct to the consumer, they do business on QVC and they do a lot more business with GNC than we do,”​ Tolworthy said.

Streamlined manufacturing

Another aspect of the buyout is the manufacturing potential offered by Reserveage, Tolworthy said. One aspect of his vision for the company was to take full advantage of Twinlab’s manufacturing capabilities at its plant in American Fork, UT, capabilities that were expanded with the Nutricap acquisition.  The Reserveage line is currently made via a number of contract manufacturing relationships, and over time the plan is to bring that in house.

“We can make as much as 80% of what they have through our own facility, though we are not in any great hurry to do that,” ​Tolworthy said. 

But the most important aspect of the deal, Tolworthy said, was that it marries two companies with similar cultures.  It’s envisaged that the Organic Holdings management team will remain mostly intact, and the company will continue as a somewhat standalone entity for the foreseeable future.

“They have their own payroll, their own ERP software, their own distribution. I don’t anticipate making a lot of changes in the management team. The most important thing to mention is that Naomi and I consider our businesses to have like culture. It is two companies coming together culturally to grow a great business and a help grow the industry,” ​Tolworthy said.

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