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NBTY Buys Solgar and SISU
Increasing its position in the domestic and international dietary supplement
manufacturing and marketing arena, NBTY has purchased the Solgar Vitamin and
Herb Co. from Wyeth Consumer Healthcare. On June 7, 2005 NBTY announced the acquisition
for $115 million, including about $64 million in total assets.1Wyeth(when it
was previously known as American Home Products) purchased Solgar in 1998 for
a reported $425 million from owner Alan Skolnik and his family. The company was
founded by Skolnik’s father in 1947. Total sales for Solgar in 2004 were
$105 million.
Solgar has long been a respected name in the dietary supplement industry with
its products being sold in almost 5,000 health food stores, natural product stores,
natural pharmacies and specialty stores across the United States. Solgar products
are also sold in 40 countries in North and South America, Asia, the Middle East,
Europe, South Africa, Australia and New Zealand.
The Solgar purchase is intended to strengthen NBTY’s position in the
natural food store channel where it currently markets several brands, including
Good and Natural®, American Health®, and others. NBTY Chairman and CEO
Scott Rudolph stated in a company press release, “Solgar will strengthen
NBTY's presence in the health food store market. The Solgar brand will be focused
on serving the needs of the independent health food store across the United States.
It is a significant opportunity for NBTY to grow both domestically and internationally."1
A few days after announcing the Solgar acquisition, NBTY announced the purchase
of the Canadian supplement manufacturer distributor SISU Enterprisesfor
$5.7 million (USD) in cash plus NBTY’s payment of SISU’s indebtedness
of $2.5 million (USD).2 SISU had sales in 2004 of about $14 million (USD). The
company was founded in Burnaby, B.C. in 1981 by Harlan Lahti, a pharmacist, herbalist,
and owner of Finlandia Pharmacy in Vancouver, B.C., one of the first natural
pharmacies in North America. Lahti sold SISU in 2003 and the new owner sold the
company to NBTY.
NBTY’s purchase of Solgar from a pharmaceutical company occurs less
than a year after Abbott Laboratories purchased EAS (Experimental and Applied
Sciences), a manufacturer of specialty sports enhancement drinks, dietary supplements
and related products. Len Monheit of the NPI Center (www.npicenter.com),
a natural products industry-oriented website, commented that the timing of the
Solgar purchase “might indicate a difference in opinion over the future
direction of the industry by the pharmaceutical sector, or more likely, a measure
of faith [on Abbot’s part] that the sports nutrition and specialty products
offered by EAS have more potential for growth and opportunity than the vitamins
and herbs offered by Solgar.”3
NBTY is a publicly traded company and owns numerous brands in the natural
food, mass market, and mail order channels, including such brands as its original
brand Nature’s Bounty®, plus Good and Natural®, Rexall®, Sundown®,
Puritan’s Pride®, MET-Rx®, American Health®,and numerous others.
NBTY also owns Vitamin World, a chain of supplement stores located primarily
on the East Coast, Holland & Barrett, a natural food store chain in the UK,
and Le Naturiste Jean-Marc Brunet -- a chain of 103 stores located throughout
Quebec, purchased in February for about $5 million (USD). Total sales for NBTY
in the 2004 fiscal year were $1.6 billion.
---Mark Blumenthal
References and Sources
1. Anon. NBTY to acquire Solgar. [press release]. Bohemia, NY: NBTY, Jun 7,
2005. Available at: <http://www.npicenter.com/anm/templates/newsATemp.aspx?articleid=12653&zoneid=12>.
Accessed Jun 23, 2005.
2. Anon. NBTY Expands Market Presence in Canada With Acquisition of SISU Inc.
[press release]. Bohemia, NY: Jun 9, 2005. Available at: <http://www.nbty.com/ireye/ir_site.zhtml?ticker=nty&script=410&layout=8&item_id=718762>.
Accessed Jun 23, 2005.
3. Monheit L. Editorial: How hungry is NBTY? NPI Center.com, Jun 10, 2005.
Available at: <http://www.npicenter.com/anm/templates/newsATemp.aspx?articleid=12686&zoneid=42>.
Accessed Jun 24, 2005.
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