The company acquired Florajen, which it bills as the “No. 1 pharmacist recommended probiotic brand where it is sold.” Florajen is a line of refrigerated products, which is becoming something of a rarity in the probiotics business, where demonstrating shelf life and stability at ambient temperatures has been part of what has driven consumer acceptance and has helped brands garner more shelf space. But refrigeration, while inconvenient, also helps support the brand’s message of potency, freshness and quality. Some critics of the probiotics field claim that for many probiotics, supplementation amounts to little more than dead cell therapy because so few of the cells remain viable by the time a consumer might ingest them. The common way to deal with this has been massive, undisclosed overages in CFU counts, these critics claim. While supplementation with dead cells might have some evidence backing it, it’s not what the product claims on the label, they say.
“Florajen is the perfect addition to our portfolio. We have a longstanding history of partnering with healthcare professionals to provide consumers with trusted solutions to their everyday health needs, and Florajen represents both an exciting and strategic next step for us,” said Clarion Brands CEO Gary Downing.
Private equity boom
Clarion Brands, a ‘portfolio company’ of Swander Pace Capital, also includes a couple of other OTC-type brands. This is the second acquisition by Swander Pace in the dietary supplement field in just this year. In January, Swander Pace announced the acquisition of Swanson Health Products, an online retailer that carries more than 27,000 health and wellness products sold under its own and third-party brands, including vitamins, minerals, supplements, sports nutrition, natural food, and beauty products. The family-founded business reaches consumers through its significant e-commerce operations as well as its catalog. In addition to its North American base, Swanson services consumers globally through online operations and distributors in 51 countries. Swanson was a privately held company and the terms of the acquisition were not disclosed, but it reportedly had annual revenues in excess of $300 million.
This latest Swander Pace deal is part of a trend of the movement of private equity capital into the dietary supplement industry. In 2014 InterHealth was acquired by a private equity firm and that entity subsequently snapped up Next Pharmaceuticals in 2015. And also in 2014 Canada’s largest supplement manufacturer, Jamieson Labs, was sold to a US private equity firm for $300 million. Jamieson is now reportedly again for sale after being approached by a Chinese company. According to the Wall Street Journal, the asking price could be as high as $1 billion.
For industry observer Scott Steinford, president of both the Natural Algae Astaxanthin Association (NAXA) and the CoQ10 Association, it’s an indication that the supplement industry continues to be a hot investment target.
“There are a lot of indications that even though we’ve been subject to a lot of negative publicity over the past year that there is still a very active market in this regard,” Steinford told NutraIngredients-USA.