Castanea Buys Supplement Biz
The Massachusetts buyout firm merges two companies, Health Resources and Vitamin Research Products, to launch a new platform.
February 2, 2010
As the nutritional supplement industry sees a familiar wave of private equity interest, Newton, Massachusetts-based private equity firm Castanea Partners acquired a stake in two nutritional companies. Financial terms of the transactions were not disclosed.
The consumer-focused buyout firm will merge the nutritional supplement companies, Hueytown, Alabama-based Health Resources and Carson City, Nevada-based Vitamin Research Products, creating a new platform company. Co-managing partner Robert Smith and partner Troy Stanfield worked on the transaction for Castanea.
Los Angeles, California-based investment bank Imperial Capital served as Health Resources’ financial advisor in the sale. Managing director Brian Wood led the deal for Imperial.
Ropes & Gray attorneys served as Castanea Partners' legal advisor in both transactions. Jane Goldstein and Jason Freedman led Ropes & Gray's legal team.
The sector has seen a rise in interest from buyout firms over the past year, with mixed results. In August 2009, Ryan Drexler, the former president and chief executive of Hauppauge, New York-based Country Life Vitamins, bid to acquire Nutraceutical International Corp.
This is not the first incarnation of private equity investments in the sector. In June 1997, North Castle Partners, a Greenwich, Connecticut-based private-equity firm acquired Leiner Health Products Inc., a vitamins and nutritional supplements manufacturer. The portfolio company later filed for Chapter 11 bankruptcy protection in March 2008. In December 2002, BSMB, the private equity affiliate of Bear, Stearns & Co. Inc., acquired Vitamin Shoppe.
In July 2007, Castanea closed its third fund, Castanea Partners Fund III, L.P., with $575 million in committed capital. The firm's previous fund, Castanea Partners Fund II, closed in October 2004 with $207 million in committed capital.
Castanea was unable to comment on the deal by press time Tuesday. Calls placed to Imperial Capital were not returned by press time.
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