KKR signs deal to acquire majority stake in Nature's Bounty

By Hank Schultz contact

- Last updated on GMT

The private equity firm will be the majority owner of Nature's bounty. ©iStock
The private equity firm will be the majority owner of Nature's bounty. ©iStock
Investment interest in the dietary supplement industry remains high, with the latest news being the sale of majority control of The Nature’s Bounty Co. to private equity firm KKR.

KKR, also known as Kohlberg Kravis Roberts, manages investments around the globe, with investments in healthcare companies an important part of the company’s portfolio. According to Reuters, the company is close to a deal to buy health information purveyor WebMD​.

The firm had already taken a big position in the dietary supplement industry with the acquisition of Capsugel in 2011 from Pfizer for $2.4 billion. KKR seemed to have turned a tidy profit on that investment, with the announcement earlier this month that it had sold Capsugel to Swiss firm Lonza for $5.5 billion, which included the refinancing of $2 billion in debt that was on Capsugel’s books. KKR also counts Santanol, an Australian producer of sandalwood oil (an essential oil) as one of its portfolio companies.

KKR made its name as a ‘leveraged buyout’ firm; in other words, using borrowed funds to finance a transaction, with that debt then being transferred to the acquired entity. In addition to buying and selling portfolio companies in a host of industries, the company also performs other financial services, including brokering a $3.1 billion loan earlier this year to refinance the Formula One racing circuit. The company went public in 2011, and reported $550 million after-tax economic net income in its most recent quarter​. KKR is set to report its results for the second quarter later this week.

KKR has now acquired Nature’s Bounty from another private equity firm, The Carlyle Group, which acquired Nature’s Bounty for almost $4 billion in 2010. Following the transaction, which is expected to close by the end of 2017, and is subject to the receipt of customary regulatory approvals and the satisfaction of other customary closing conditions, KKR will be the majority owner of Nature’s Bounty, while Carlyle will retain a significant stake in the company. Financial terms were not disclosed.

We are delighted to move forward with KKR and excited to pursue the significant growth opportunities ahead in a dynamic and expanding global wellness industry. We have transformed the business during our partnership with Carlyle, and we look forward to their continued involvement,​ said Steve Cahillane, president and CEO of Nature’s Bounty.

The company had been on block since early 2017.

This announcement follows Nature’s Bounty’s recent agreement to sell its UK-based Holland & Barrett retail chain to L1 Retail, the retail investment arm of LetterOne. KKR is acquiring a majority stake in the remaining business of Nature’s Bounty, known as the Consumer Products Group (CPG). Headquartered in Ronkonkoma, NY, Nature’s Bounty’s CPG business includes brands such as Nature’s Bounty, Sundown Naturals, Solgar, Osteo Bi-Flex, MET-Rx, Pure Protein, Body Fortress and Puritan’s Pride.

The announcement that the remainder of Nature’s Bounty has been sold is not exactly earth-shattering news. The company had engaged Goldman Sachs Inc. as an advisor earlier this year. At that time, a Reuters report speculated that the company could fetch as much as $6 billion​ on the open market.

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