Rexall Enters Sports Arena with MET-Rx DealRexall Enters Sports Arena with MET-Rx Deal
December 20, 1999
BOCA RATON, Fla.--Dietary supplement maker Rexall Sundown Inc. (NASDAQ:RXSD) signed a definitive agreement to buy Irvine, Calif.-based sports nutrition manufacturer MET-Rx Nutrition Inc. for a total purchase amount of $108 million. Accounted for as a purchase, this acquisition will be financed with a line of credit and is expected to close around mid-January, according to Rexall officials.
MET-Rx is expected to post net sales of $105 million for the fiscal year ended Dec. 31, and the company has achieved annual growth rates of 30 percent in each of the past two fiscal years. Its line of sports nutrition bars and beverages--including Source One bars and Total Nutrition drink mixes--is distributed primarily through the health and natural food channel, as well as food, drug and mass retailers, club stores, fitness centers and convenience stores.
On the heels of the acquisition announcement, Rexall reported increased sales and earnings per share (EPS) for its fiscal 2000 first quarter ended Nov. 30. Sales hits $142 million, up 16 percent from $122.1 million sold in the comparable period last year. Despite a less than one percent drop in net income, EPS climbed to $.18 per share, up from $.16 per share a year ago. The sales increase was attributed to the introduction of Metab-O-Lite, a diet and energy supplement that became the number one selling retail product in the diet tablet category with a 23-percent market share, according to the company. Softness in the direct selling industry was cited as a major factor in decreased sales from the company's Rexall Showcase business.
The company has moved to accelerate growth rates and expands its portfolio with the MET-Rx acquisition, as well as an introduction of Pokemon children's vitamins and a foray into functional foods with its Metab-O-Lite and Ultra Chroma Slim brands. An aggressive move towards e-commerce is also planned for the company's Rexall Showcase business.
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