NBTY announces agreement to acquire Leiner

6/10/2008

RONKONKOMA, N.Y. NBTY announced Tuesday that it had pulled the trigger on its proposed acquisition of Leiner Health Products by fielding the best and highest bid at an auction held June 9 for the purchase of substantially all of the assets of Leiner.

The acquisition makes NBTY the largest supplement supplier in North America, according to analysts.

The purchase price was $371 million plus assumption of certain liabilities, up from $230 million proposed May 30.

“The Leiner acquisition reflects our ongoing efforts to better meet the needs of our customers by providing them with the highest quality service and continuous product supply,” stated NBTY chairman and chief executive officer Scott Rudolph.

The purchase agreement provides for a downward purchase price adjustment if the amount of actual working capital at the closing is less than $110 million, and for an upward purchase price adjustment if the amount of actual working capital at closing is greater than $110 million.

The agreement is subject to the approval of the bankruptcy court presiding over Leiner’s chapter 11 bankruptcy proceedings.

NBTY expects to consummate the acquisition by no later than September.

Leiner Health, which entered bankruptcy proceedings in March, ran afoul of the Food and Drug Administration last year, when its Fort Mill, S.C. plant, which manufacturered over-the-counter medicines, was found to be out of compliance with Good Manufacturing Practices. Following a recall of Leiner OTC products, Leiner closed the Fort Mill facility and temporarily suspended distribution of OTC products.

For the six months ended Sept. 29, 2007, the last time a quarterly earnings report was filed, Leiner recorded net sales of $233 million and a net profit loss of $53.8 million.

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