Schiff Nutrition International, Inc., (NYSE: WNI), acquired
Airborne, Inc., a leading provider of immune support products on
March 30, 2012 for $150 million in cash, subject to certain
adjustments.
“Schiff is focused on building premium brands and leading
innovation,” stated Tarang Amin, president and chief executive
officer. “We are excited about the Airborne acquisition, which fits
well with our strategy and establishes Schiff as a leader in the
immune support segment. Airborne is a strong brand and will make an
excellent addition to Schiff’s portfolio, and we plan to leverage
our science, innovation, marketing and sales capabilities to
further its growth.”
Airborne develops and sells innovative dietary supplements
throughout the United States and Canada, as well as online. Its
Airborne health formula is designed to support customers’ immune
systems through its unique combination of vitamins, nutrients and
proprietary blend of herbal extracts. Its immune support products
include iconic effervescent tablets, new chewable tablets and
on-the-go packets, all in a variety of flavors. Airborne can be
visited online at www.airbornehealth.com.
Marti Morfitt, Airborne, Inc.’s chief executive officer, stated:
“I am very proud of the work the Airborne team has done over the
past three years to re-establish the growth of the brand and to
develop a strong pipeline of new products and marketing programs
designed to support the future growth of the business. We are happy
to see our business move to the team at Schiff – they bring great
talent and resources to the business and share our passion for
building a leading immune support brand.”
“Schiff intends to couple Airborne’s leading brand and product
portfolio with our strong capabilities in science and innovation,”
continued Amin. “For example, there has been promising scientific
research into the potential relationship between BC30, the
proprietary probiotics technology we acquired rights to last year,
and supporting the immune system. We are currently conducting a
study with Dr. Glenn R. Gibson at The University of Reading in the
UK on the effects of BC30 on the immune function of healthy elderly
persons. This is but one of the many potential opportunities to
bring science and innovation to Airborne.”
Terms of Deal and Financial Impact
Under the terms of the purchase agreement, Schiff acquired 100%
of Airborne’s stock from GF Capital Private Equity Fund, LP for
$150 million, subject to certain adjustments. Schiff funded the
all-cash transaction through a combination of a new debt facility
and cash on its balance sheet.
Airborne, Inc. generated net revenue of approximately $70
million for the twelve months ended February 29, 2012.
Preliminarily, the company expects to recognize transaction related
costs of approximately $4.5 million in fiscal 2012, of which $0.9
million was recognized during the third fiscal quarter.
The transaction is expected to become accretive during the first
half of fiscal year 2014. The company is in the process of
finalizing its overall cost of capital, completing its valuation of
the acquired business, including allocation of purchase price to
primarily intangible assets, and determining the expected timing of
certain synergies. Management expects to further address the
overall impact of the acquisition on its financial results and
future outlook when it announces its fourth quarter and fiscal 2012
financial results.
Houlihan Lokey acted as financial advisor to Schiff in
connection with the transaction.
Conference Call Information
Schiff will hold a conference call today, April 2nd, at 1:00
p.m. ET. The event will be webcast at the company’s website at
www.schiffnutrition.com. The webcast replay will be available for
90 days. If you do not have Internet access, the dial-in number
will be 1-866-700-0161 for domestic callers and 1-617-213-8832 for
international callers. The participant pass code is 86364520. A
replay of the call will be available by dialing 1-888-286-8010 for
domestic callers and 1-617-801-6888 for international callers, and
entering pass code 35086433. The telephone replay will be available
through April 9, 2012.
About Schiff Nutrition
Schiff Nutrition International, Inc. is a leading nutritional
supplement company offering vitamins, nutritional supplements and
nutrition bars in the United States and abroad. Schiff’s portfolio
of well-known brands includes Schiff Move Free®, Schiff® Vitamins,
Schiff MegaRed®, Schiff Mega-D3®, Tiger's Milk®, Schiff Sustenex®,
and Schiff Digestive Advantage®. Focused on quality for 75 years,
Schiff’s headquarters and award-winning manufacturing and
distribution facility are based in Salt Lake City, Utah. To learn
more about Schiff, please visit the web site
www.schiffnutrition.com.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 that are based
on management’s beliefs and assumptions, current expectations,
estimates, and projections. These statements are subject to known
and unknown risks and uncertainties, certain of which are beyond
the company’s ability to control or predict, and therefore, actual
results may differ materially. For example, statements concerning
future benefits, opportunities and the financial impact of the
acquisition of Airborne are forward-looking statements. Any
forward-looking statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 and, as such, speak only
as of the date hereof. Schiff disclaims any obligation to update
any forward-looking statements whether as a result of new
information, future events or otherwise. You are cautioned not to
place undue reliance on these forward-looking statements.
Important factors that may cause actual results of Schiff to
differ materially from those expressed or implied by such
forward-looking statements include, but are not limited
to: the inability to successfully integrate Airborne into
Schiff’s operations or to achieve the anticipated synergies,
benefits or other opportunities of the Airborne acquisition, the
inability to perform obligations under, or to operate within the
constraints of, the new debt facility, dependence on sales of
Schiff Move Free product and the joint care category, dependence on
sales of Schiff MegaRed product, dependence on individual
customers, adverse publicity or consumer perception regarding our
nutritional supplements and/or their ingredients, similar products
distributed by other companies or the nutritional supplement
industry generally, the impact of competitive products and pricing
pressure (including expansion of private label products), the
inability to successfully bid on new and existing private label
business, the impact of raw material pricing, availability and
quality (particularly relating to joint care products and
ingredients from third-party suppliers outside the United States,
including China), claims that our products infringe the
intellectual property rights of others, the inability to enforce or
protect our intellectual property rights and proprietary techniques
against infringement, the inability to successfully launch and
maintain sales (especially in the joint care and omega-3
categories) outside of the United States while maintaining the
integrity of the products sold and complying with local
regulations, the inability to appropriately respond to changing
consumer preferences and demand for new products, the inability to
gain or maintain market distribution for new products or product
enhancements, including products in the probiotic space, litigation
and government or administrative regulatory action in the United
States and internationally, including FDA enforcement and product
liability claims, the inability or increased cost to obtain
sufficient levels of product liability and general insurance, the
inability to comply with existing or new regulations, both in the
United States and abroad, and adverse actions regarding product
formulation, claims or advertising, product recalls or a
significant amount of product returns, dependence on a single
manufacturing facility and potential disruptions of our
manufacturing operations, the inability to find strategic
transaction opportunities or the inability to successfully
consummate or integrate a strategic transaction (including the
inability to successfully integrate the business recently acquired
from Airborne), the inability to maintain or attract key personnel,
interruptions to our information technology systems, control by our
principal stockholders, and other factors indicated from time to
time in the company’s SEC reports, copies of which are available
upon request from the company’s investor relations department or
may be obtained at the SEC's web site (www.sec.gov). These risks and uncertainties should
be carefully considered before making an investment decision with
respect to shares of our common stock.
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