Big Deal: Clorox to Buy Nutranext for $700 Million

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Oakland, CA — Consolidation in the supplement industry is escalating with the Clorox Co. agreeing to buy Nutranext — owner of Neocell, Rainbow Light, and Natural Vitality brands — for $700 million. Clorox already owns RenewLife.

The Sunrise, FL based Nutranext manufactures and markets leading dietary supplement brands in the retail and ecommerce channels. The deal includes the company’s direct-to-consumer business, primarily its Stop Aging Now brand. About 90% of Nutranext sales are in the U.S., according to a company release.

“Adding Nutranext to our portfolio is consistent with our strategy to accelerate growth through acquisitions of leading brands in fast-growing categories with attractive gross margins and a focus on health and wellness,” said Clorox chairman and CEO Benno Dorer. “We’re looking forward to leveraging our proven capabilities in brand building, including innovation and digital marketing, as well as strong partnerships in retail and ecommerce to accelerate growth of Nutranext brands.”

“I am very proud of the growth we have accomplished over the last 30 years,” said Jose Minski, Nutranext founder and CEO. “This growth has been possible thanks to our dedicated employees who have carried our values and mission to improve ourselves and the world around us.”

“I am excited Nutranext is joining the Clorox family, a company distinguished by its innovation and like-minded mission of developing products that enhance the lives of consumers every day. I am confident that with Clorox, Nutranext brands are well positioned for the next phase of growth,” he added.

The Nutranext acquisition brings significant scale and breadth to Clorox’s dietary supplements business. It follows the company’s May 2016 acquisition of the RenewLife® brand, a leader in digestive health. Clorox’s brand-building capabilities and retail execution behind the RenewLife brand have led to strong growth in the e-commerce channel and expanded distribution in the retail channel.

In calendar year 2017, Nutranext generated sales of about $200 million, according to a company statement. The $700 million purchase price represents about 3.5 times calendar year 2017 sales.

The company expects to fund the transaction through a combination of available cash and debt financing, while maintaining a Debt/EBITDA ratio within its target range of 2.0x to 2.5x. The transaction is subject to certain closing conditions, including customary regulatory approvals, and is expected to close in the company’s fiscal fourth quarter, which ends June 30, 2018.

“We believe this move for Clorox is as much about Nutranext’s omni-channel capabilities and competencies, as it is about pushing further into health and wellness,” said William S.J. Hood, managing director of William Hood & Co. “There are very few middle-market companies/brands that are playing in multiple channels successfully like Nutranext: FDM, specialty and DTC, the latter being very high on large CPG’s shopping list list right now. In addition, none of the brands were particularly attractive stand-alones to large CPG, both as a result of their scale, as well as their profile.  It was the sum of the parts that proved right for Clorox at the right time.”

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