NBTY Leiner Buy Intensifies Supplement Ingredient Competition
This article was originally published in The Tan Sheet
The dietary supplement ingredient supply market is set to become more competitive with NBTY's planned acquisition of Leiner Health Products
You may also be interested in...
Dietary supplement manufacturer NBTY's gross margins are unlikely to exceed 50 percent again largely because private-label product sales have nearly doubled since its acquisition of Leiner Health Products
NBTY's acquisition of Leiner Health Products scared some investors initially, but now they see the integration of the private-label supplement maker as a success, NBTY President and Chief Financial Officer Harvey Kamil says. The stock market appreciates "that we were able to make" Leiner "a profitable acquisition," Kamil said Sept. 23 at the Canaccord Adams Healthy Living Conference. He said NBTY was "squeezed" because it paid "very high prices" for products to build up inventory to serve Leiner's customers. From buying Leiner in June 2008 through March 2009, NBTY took losses on many of the items it shipped, but it made the deal profitable after raising prices in April, Kamil added (1"The Tan Sheet" June 16, 2008). For the April-June period, the firm reported flat net income due to higher costs despite a 21.9 percent increase in net sales to $651.7 million (2"The Tan Sheet" Aug. 17, 2009)
Supplement manufacturer NBTY expects the addition of Leiner Health Products' business will increase its annual sales by more than $500 million - nearly 25 percent