NBTY proposes $230 million buyout of Leiner

RONKONKOMA, N.Y. NBTY on May 30 proposed buying troubled private-label manufacturer Leiner Health Products in a deal worth $230 million plus the assumption of certain liabilities, according to an NBTY SEC filing.

The proposed buyout of Leiner, which filed for bankruptcy protection March 10, will be subject to higher or better offers and if any are proffered, the ownership of Leiner Health will be decided at a June 9 auction

If no higher or better offer is submitted by a competing bidder, the purchase transaction is expected to close no later than September.

Leiner in March filed its second bankruptcy in seven years, and is also emerging from a manufacturing scandal, in which the company last month pled guilty to mail fraud and forfeited $10 million to close the chapter on a U.S. Department of Justice investigation into Leiner’s now-closed Fort Mill, S.C. production facility following a Food and Drug Administration warning letter that “found many serious deviations [at that facility], some of which involved data manipulation and inadequate testing procedures.” The FDA concluded that “the products manufactured at [the Leiner] facility under these violative conditions put consumers at significant risk.”

Early last year, Leiner had stopped making over-the-counter drugs at that facility. In addition, Robert Kaminski resigned as company chief executive officer and was succeeded by Robert Reynolds.

The recent agreement in no way implicates or affects Leiner’s ability to manufacture and distribute vitamin and mineral products, the company stated.