KKR enters market for popular supplements, buys majority stake in Nature's Bounty

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Private equity firm KKR is purchasing a majority stake in The Nature’s Bounty Co., a manufacturer of vitamins and other wellness products for the body, from the Carlyle Group LP (Nasdaq: CG). The agreement comes on the heels of Nature’s Bounty selling its U.K.-based retail business Holland & Barrett, a chain of health healthy foods and supplement shops, to investment firm L1 Retail.

Nature’s Bounty develops a variety of supplements and multivitamins aimed to help improve the body, hair, skin and nails. The Ronkonkoma, New York-based target has made more than 16,000 products across a number of brands, including: Nature’s Bounty, Sundown Naturals, Solgar, Osteo Bi-Flex, MET-Rx, Pure Protein, Body Fortress, Puritan’s Pride and Organic Dr. Financial terms of the deal were not disclosed; however, Carlyle will retain a stake in the company.

Based in New York, KKR is a global investment firm that manages a variety of investments, including: private equity, energy, infrastructure, real estate, credit strategies and hedge funds. KKR is providing equity capital for the deal from the firm’s Americas XII fund. The target fits into KKR's retail portfolio as the only manufacturer of "wellness" vitamins.

The Carlyle Group, headquartered in Washington, D.C., is a global asset management firm with offices across North America, South America, Europe, the Middle East, Africa, Asia and Australia. The firm has nearly $162 billion in total assets under management and first backed Nature’s Bounty in 2010 from its $137 billion U.S. buyout fund Carlyle Partners V. In 2016, Carlyle completed capital raising for a $507 million CLO and raised a $2.8 billion credit fund.

Despite questions about the content of some supplements, the middle-market has seen multiple deals involving nutritional wellness products and vitamin producers include: HGGC’s buying of Nutraceutical International Corp. (Nasdaq: NUTR) for $446; Swander Pace Capital’s purchase of Swanson Health Products’ vitamin portfolio; The Clorox Co.’s (NYSE: CLX) acquisition of probiotics maker Renew Life Holdings Corp.; WhiteWave Foods Co.’s (NYSE: WWAV) $550 million deal to buy Sequel Natural Ltd.; and Helen of Troy’s buying of nutritional supplement group Healthy Directions LLC for $195 million.

Goldman Sachs (NYSE: GS), Houlihan Lokey Inc. (NYSe: HLI), UBS Investment Bank (NYSE: UBS) is acting as financial advisers to Carlyle, while Latham & Watkins, PricewaterhouseCoopers and The Boston Consulting Group are serving as legal counsel. Simpson Thacher & Bartlett LLP is serving as legal counsel to KKR, while Deloitte is acting as financial adviser.

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