KKR’s Acquisition of Nature’s Bounty from Carlyle Brings Growth in the VMS Space into Focus
Business intelligence platform Informa has published two articles in its “Rose Sheet” that address the supplement industry and the Nature’s Bounty Co. deal between the Carlyle Group and KKR & Co. L.P. Consumer Health Editor Malcolm Spicer reached out to SDR Managing Director Travis Conway to get his thoughts.
In the first article, Spicer focuses on the sale of a majority share in Nature’s Bounty from the Carlyle Group to KKR. Conway’s take on this sale was positive, “I think for a seven-year investment cycle, my guess is this is viewed as a success, a hard-fought success for Carlyle.”
However, Carlyle’s avoidance of the IPO exit strategy has many in the industry talking. “When you’re talking about the Carlyles of the world from an investment exit perspective, IPO’s always on the radar,” said Conway. “But an IPO isn’t necessarily the end all or be all as an exit. There’s opportunity to sell to a large strategic [investor], or do a large trade-up or sell within the financial sponsor arena.”
There was an atypical part of this private equity transaction as well, with Carlyle’s retention of a minority stake in Nature’s Bounty. Conway stated, “My sense is that seven years into an investment to not make a complete exit does raise an eyebrow.” He continued, “It’s also possible that there is a continued upside that Carlyle wants to be a part of and that’s why they’d leave that minority investment in there.”
Spicer’s second article touches on the increasing presence of private equity firms in the supplement industry. Conway summed up the trend by saying, “You look at any consumer-branded private equity business and they either have a portfolio holding or are actively looking for a portfolio holding in health and wellness or healthy living or more specifically in the vitamin, mineral and supplement space.”
Spicer goes on to point out that there are specific categories in the supplement industry that are growing faster than others. He points to sports nutrition and healthy aging as examples. “We’re seeing this convergence of healthy living and that consumer-driven mentality showing tremendous pickup for a lot of categories, healthy aging being one of them,” concluded Conway.
Clearly, the supplement industry is very active with an aggressive investment outlook thanks to continued growth in the space.
To read “KKR Steers Nature’s Bounty With Carlyle In Back Seat After Seven-Year Ride” on the Rose Sheet (subscription required), please click here.
To read “Supplement Industry Investment Continues On Swander Pace Contract Manufacturing Move” on the Rose Sheet (subscription required), please click here.
To access SDR’s latest health & wellness M&A and investment reports, click here.