HerbalEGram: Volume 5, Number 1, January 2008

Natrol, Inc., a Chatsworth, California manufacturer and marketer of dietary supplements and nutritional products, has been acquired by Plethico Pharmaceutical Limited of India.¹ In November 2007, one of Plethico’s subsidiaries, Nutra Acquisition Company, signed a merger agreement with Natrol that stated Plethico would acquire all outstanding shares of Natrol’s common stock at a price of $4.40 per share at a total of about $80.8 million.^1,2

The transition was approved by Plethico and Natrol’s board of directors and during the tender offer period, the above mentioned Plethico subsidiary acquired enough Natrol shares to have a short-term merger into Natrol without the vote of the remaining Natrol stockholders.^1,2 This acquisition was completed December 27, 2007.

“As a shareholder it is safe to say that all shareholders received a significant value return based on average trading value over the past few years,” wrote Elliot Balbert, founder and executive chairman of Natrol (e-mail, December 24, 2007). “Management fulfilled their operational responsibilities to deliver value for investment.” However, this does not mean that Natrol will disappear. It is instead “an American company that will become privately held by a foreign parent,” said Balbert.

This merger was attractive to Plethico because, according to Wayne M. Bos, president and CEO of Natrol (e-mail, January 4, 2008), Plethico has significant ambition for its global strategy and wanted to enter the US market. Additionally, according to a statement by Bos in a Natrol press release, the situation is also a “win-win”¹ for Natrol’s customers and employees. “More focus on new innovation means new and improved technology and products for customers and greater diversity in job prospects as well as growth for employees,” wrote Bos.

Bos also noted that this merger will enable Natrol to have greater access to capital, new markets, and new products. However, this decision was not made in a business vacuum. “Good business decisions are made with many elements being considered. All stakeholders positions are considered, including shareholders, employees, and customers,” wrote Bos. “The combined companies are on a strong growth path and all new strategy decisions will need to consider the human and financial resources.”

Natrol, Inc. was founded by Balbert in 1980 and went public in 1998. The company has produced and marketed a line of dietary supplements sold in health food stores and mass market retail outlets under the Natrol® brand name, as well as producing and/or acquiring such brands as MRI, Prolab®, Laci Le Beau®, Promensil®, Trinovin®, Nu Hair® and Shen Min®.³ More information is available at http://www.natrol.com/. Plethico Pharmaceuticals Limited of Mumbai, India manufactures, markets and distributes pharmaceuticals and nutritional products in India and internationally. More information about Plethico is available at http://www.plethico.com/home.html.

—Kelly E. Saxton

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