Wednesday, November 26, 2008

Renew Life Formulas rumored to be for sale, sources say

Renew Life Formulas, a Tampa Bay, Florida-based natural health products company, is rumored to be for sale, said two industry sources. 
Renew declined repeated requests for comment or an interview.
The privately-held company, worth roughly USD 100m, has been for sale for some time, but a sale probably has not happened because private equity buyers are struggling to get financing on deals, said a banker claiming knowledge of the situation. 
Renew has probably reached its peak in terms of growth potential, and now may be looking to sell to a larger player to continue company growth, said an industry executive. 
Recently another supplement company similar in size to Renew Life sold at 6x EBITDA, and the USD 100m valuation might also fetch that multiple, the industry banker said. 
According to a private equity executive, however, valuations in the space are about 2x revenue. 
Though private equity may have a hard time buying Renew, a smaller group of strategic buyers could be interested, the banker said. 
NBTY is “an 800 pound gorilla” in this industry, and may be interested in Renew; however, it typically buys brands for cheap, the industry executive said. 
Enzymatic Therapy also may see value in acquiring Renew, the industry executive added. CEO Randy Rose of Enzymatic declined to comment on whether his company would be interested in Renew or if he had heard if Renew Life was for sale. 
Optimum Nutrition, BSN and Universal Nutrition may acquire brands to supplement organic growth, added the private equity executive. 
Acquiring an established brand has greater value than creating a new brand, the industry executive explained.
The industry is also recession resistant because of its dedicated customer base, said the private equity executive, adding that this makes a nutritional supplement company a solid investment for private equity or strategic players. 
Renew Life is a maker of natural digestive care and cleansing dietary supplements. 

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