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NBTY, a leading marketer and distributor of nutritional supplements, announced on August 14 that it has entered into a contract to acquire Zila Nutraceuticals, a unit of Zila, Inc. of Phoenix, Arizona.1 Zila manufactures and markets the nutritional supplement brand Ester-C. The reported sales price was for around $40 million. NBTY has further agreed to pay up to a $3 million contingent payment to Zila based on certain financial performance markers. The transaction is subject to the approval of Zila shareholders but is expected to be completed by October.
“The acquisition of Ester-C expands our broad array of superior quality products with a well-recognized brand having strong consumer appeal,” said Scott Rudolph, chairman and chief executive officer (CEO) of NBTY in an NBTY press release.1 “Ester-C is known throughout multiple markets, including health food stores and mass market retailers, and its acquisition represents an opportunity for NBTY to enhance its presence in key markets.”
Ester-C is a patented non-acidic form of vitamin C and vitamin C metabolites. Zila Nutraceuticals also produces and licenses Ester-E®, an advanced form of vitamin E for use in dietary supplements.2 For the 9 months ending April 30, 2006, Zila Nutraceuticals reported net revenues of $18 million.
Zila pursued the divestiture in order to focus its efforts and resources on its cancer detection products, such as the oral cancer screening device ViziLite® and its soon-to-be launched product OraTest®.3 Zila also sold another one of its divisions, Swab Technologies, in July. NBTY, meanwhile, has been working to increase its market share by acquiring other manufacturing businesses.4 In June 2005, NBTY purchased both the well-known dietary supplement brand Solgar Vitamin and Herb from Wyeth Consumer Healthcare and Sisu Enterprises, a Canadian manufacturer and distributor of specialty supplements.5
Bohemia, NY- based NBTY produces and markets numerous brands of dietary supplements (Nature’s Bounty®, Puritan’s Pride®, Rexall®, Sundown®) in various channels of trade, including health food, mass market and mail order, and owns the Vitamin World chain of health food stores in the United States and the Holland and Barrett natural food store chain in the United Kingdom. NBTY is a publicly traded company. More at www.nbty.com.
-Courtney Cavaliere
References
1. NBTY to acquire Ester-C®: a well known branded and patented highly effective form of vitamin C [press release]. Bohemia, NY: NBTY, Inc.; August 14, 2006. Available at: http://www.nbty.com/ireye/ir_site.zhtml?ticker=nty&script=410&layout=8&item_id=895358. Accessed August 31, 2006.
2. Halliday J. NBTY to buy Zila Nutraceuticals. NutraIngredients.com. August 14, 2006. Available at: http://www.nutraingredients-usa.com/news/ng.asp?id=69840. Accessed August 31, 2006.
3. Zila selling nutraceutical division to NBTY. Natural Products Insider; August 14, 2006. Available at: http://www.naturalproductsinsider.com/hotnews/68h14132922063.html. Accessed September 1, 2006.
4. Jones D. NBTY to buy Zila Nutraceuticals for $40M. New York Business.com. August 14, 2006. Available at: http://newyorkbusiness.com/news.cms?id=14470. Accessed August 31, 2006.
5. Blumenthal M. NBTY buys Solgar and SISU. HerbalEGram. July 2005;2(3). Available at: http://www.herbalgram.org/default.asp?c=NBTY_Solgar_SISU. Accessed September 4, 2006.
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