What does the NBTY deal mean

The $3.8 billion private equity acquisition of NBTY is the largest private equity deal of 2010 (in any industry). So what does that mean for our industry? We will be digging into that question in the coming days and weeks, and we would like to hear your thoughts too. For starters, here is some of the mainstream and financial coverage that is out there.

Video interview on Bloomberg, click here

Washington Post story, click here.

Financial Times story, click here.

Who is The Carlyle Group? Click here for their website. They are a massive private equity firm with more than $90 billion under management. And this is their largest buyout since 2007. It would seem like a pretty strong vote of confidence in the future of the supplement industry for such a group to buy in like this. So does that mean we can expect to see more private equity looking at the industry? Will this drive up the value of other industry companies? Is Carlyle looking at other companies in the industry?

Another thought to consider: NBTY is the largest company in our industry, and has always been an active member of the associations, a strong advocate in regulatory and legislative arenas, etc. How will this acquisition affect those areas? Well, let's just say that it can't hurt to have a large, influential, DC-based firm like Carlyle with skin in the game. If anything NBTY's ability to defend consumer access to supplements just got even stronger.

Finally, what is the deal with all of these law firms coming out of the woodwork to announce that they are investigating the NBTY board? The firms are suggesting that the board did not shop around enough for the best deal, and therefore shareholders got stiffed. Are shareholders really upset about this? Or are the lawyers just stirring things up and shopping for a case? Whenever I see a law firm buying ads on Google to find people to hire them for a proposed suit, I get a little suspicious. Kind of like the bottom feeders who show up whenever a study or other piece of info suggests something bad about a supplement or a drug. We will keep an eye on that developing situation, but I still haven't heard about a mob of NBTY shareholders marching down the streets of Ronkonkoma.

 Stay tuned, more to come, and get in touch with me if you want to share your perspective. Find me at jonb@vpico.com or just give me a call at 480-990-1101 ext 1108.