Park City, UT — Nutraceutical International Corporation has entered into an agreement under which an affiliate of HGGC, LLC, a middle-market private equity firm, will acquire the company in a transaction valued at about $446 million that includes debt to be refinanced. Under the terms of the agreement, Nutraceutical stockholders will receive $41.80 in cash from each outstanding share of the company’s common stock they own, representing a 49% premium of the Nutraceutical’s closing stock price on May 19, 2017 and a 15.6% premium of its all time high closing price.
“We expect that the combination of HGGC’s strategic insights and the deep industry experience and knowledge of our management team will help us continue to build and grow,” said Bill Gay, chairman and CEO of Nutraceutical in a press release. “We remain committed to our employees and their families, to our customers, to our world-wide consumers and to the natural products industry.”
The agreement was unanimously approved by the company’s board of directors, and was the recommendation of a special committee of independent directors, who also negotiated the terms of the agreement with assistance from financial and legal advisors. There will now be a 60 day “go-shop” period during which Nutraceutical can actively solicit, evaluate and potentially enter into negotiations with parties who offer alternative proposals.
“Nutraceutical is a great example of a successful roll-up strategy carried out with consistency and dedication over the last 25 years,” said Les Brown, managing director and CEO of HGGC in a press release. “We have long admired their disciplined market approach, which has allowed the Company to consistently generate strong financial returns and positive cash flow.”
The transaction which is subject to customary closing conditions is expected to close the second half of 2017.