Carlyle to Acquire Vitamin Maker NBTY in $3.8 Billion Buyout

By Cristina Alesci
(c) 2010 Bloomberg News
Thursday, July 15, 2010; 12:00 AM

NBTY rose $16.44, or 44 percent, to $53.91 by 10:06 a.m. in New York Stock Exchange composite trading after Washington-based Carlyle offered to pay $55 a share in cash for the Ronkonkoma, New York-based company. That's 47 percent more than yesterday's closing price in New York trading. NTBY may solicit other bids during a 35-day period, the company said today in a statement.

The pace of LBOs is accelerating as the economy recovers and banks make more credit available. Private-equity firms are sitting on a record $507 billion in cash committed by their investors before the buyout market collapsed in mid-2007, according to London-based researcher Preqin Ltd. Most of the deals announced this year involve private-equity firms selling companies to each other.

"This transaction delivers exceptional value to our shareholders," Scott Rudolph, NBTY's chief executive officer, said in the statement.

The company lost a fifth of its value on April 27 after reporting earnings that fell short of analysts' estimates. The stock was down 14 percent this year through yesterday.

The purchase is the biggest LBO since TPG, based in Fort Worth, Texas, and Canada's CPP Investment Board agreed to buy software-provider IMS Health Inc. for $5.2 billion in November, according to data compiled by Bloomberg. The NBTY takeover is Carlyle's largest since its $6.3 billion acquisition of nursing- home operator Manor Care Inc. in 2007.

Carlyle will finance the NTBY purchase with equity from its Carlyle Partners V fund and debt provided by Bank of America Merrill Lynch, Barclays Capital and Credit Suisse, the companies said in the statement.

Bank of America and Centerview Partners LLC are financial advisers to NBTY. Barclays Capital and Credit Suisse are advising Carlyle.

NBTY's board has unanimously approved the takeover and recommended the offer to shareholders. The purchase is scheduled to be completed by the end of 2010.

© 2010