NBTY draws upon nature's bounty to cash in on the market for preventive and alternative health care. As the largest vertically integrated source of nutritional supplements in the US, the company manufactures, wholesales, and retails more than 25,000 products including vitamins, minerals, herbs, and sports drinks. Brands include Ester-C, Nature's Bounty, Solgar, and Sundown. NBTY has manufacturing facilities in Canada, China, the UK, and the US and is able to produce and package capsules, tablets, powders, and liquids. The Carlyle Group-owned company sells its goods through pharmacies, wholesalers, supermarkets, and health food stores around the world.
In the US the company has manufacturing plants in Arizona, California, Florida, New Jersey, New York, and North Carolina. Internationally, it has plants in Winnipeg and Manitoba in Canada, and in China and the UK. NTBY's products are marketed and sold in approximately 90 countries.
The company get the bulk of its revenues from its wholesale operations. Unlike many of its competitors that rely upon third-party manufacturers, the company actually manufactures 90% of the nutritional supplements that it sells and also serves as a third-party manufacturer of private-label products for a broad range of retailers.
In North America NTBY operates more than 450 Vitamin World stores in US malls. It European retail segment includes about 690 Holland & Barrett stores (including ten franchised stores in Singapore, six franchised stores in Cyprus and China, three franchised stores in Malta, and United Arab Emirates and one franchised store in Gibraltar and Hungary), 55 GNC stores in the UK, 112 De Tuinen stores in the Netherlands and 42 Nature's Way stores in Ireland.
In addition to its retail stores, NBTY operates Puritan's Pride, which sells nutritional products through mail-order catalogs and over the Internet. Based upon the success of the Puritan's Pride site, the company is establishing additional websites to support its brick-and-mortar retail brands.
To build up its manufacturing range, in 2010 it acquired a softgel capsule manufacturing plant in China and upgraded the facility to increase its capacity.
The company's revenues grew by 5% in 2012 thanks to an increase in sales from all its segments. The increase in sales in the wholesale segment was primarily due to growth in US brands such as Nature's Bounty and the sports nutrition brands (such as Pure Protein and Body Fortress) and sales to international customers. The European Retail segment increased by 6%, Direct Response/E-Commerce net sales increased by 8%, and North American Retail sales grew by 7%.
The company's net income jumped by 390% in 2012 thanks to higher revenues, a decrease in the cost of sales, the absence of merger expenses, and a decrease in interest expenses due to the prepayment of term loan B-1 on December 30, 2011.
Spotting trends early and riding them wisely is crucial in the nutritional supplement industry. While the company keeps an eye out for new products, in recent years it hasn't spent much on research and development, preferring instead to simply acquire or copy products with proven sales. The company introduced more than 160 new products in 2012.
NBTY has grown big and strong as the entire natural products industry has boomed, but a steady diet of acquisitions has supplemented its growth. NBTY's sales are still heavily concentrated in the US and UK. It has plans to deepen its presence in emerging international markets where the growing amount of consumer income can be used to alleviate nutritional deficiencies.
Mergers, Acquisitions, and Divestitures
In 2012, the company spent $78 million to acquire Balance Bar Company, which makes and markets nutritional bars. To raise cash, that year NBTY sold its Le Naturiste unit (retail stores in Canada) to an unrelated third party.
The Carlyle Group paid about $3.8 billion to acquire NBTY in 2010.