NBTY to buy Zila Nutraceuticals

By Jess Halliday

- Last updated on GMT

Related tags Nutrition

Ending months of speculation, NBTY has announced that has entered
into an agreement to purchase Zila Nutraceuticals, maker of Ester-C
vitamin C, for around $40m.

Arizona-based Zila first announced that it was in discussions with several of its customers over a sale of the nutraceuticals division up for sale in June, in order to concentrate its efforts on its pharmaceutical and biotechnology divisions. Until now, it has treated nutraceuticals as a cash cow to get these activities off the ground.

For NBTY, the acquisition represents an entry into the ingredients sector, since Ester-C has proved to be a popular brand with other supplements makers around the world.

For the nine months ended April 30 2006, Zila Nutraceuticals reported net revenue of $18m. The division also licenses Ester-E, the advanced form of vitamin E licensed by Zila Nutraceuticals from Australia's Phosphagenics for use in dietary supplements in the US, Canada and Indonesia.

A spokesperson for the company had not responded to enquiries about future plans for the division and the brand prior to publication.

NBTY chairman and CEO Scott Rudolph said: "The acquisition of Ester-C expands our broad array pf superior quality products with a well-recognised brand having strong consumer appeal.

Ester-C is known throughout multiple markets including health food stores and mass market retailers and its acquisition represents an opportunity for NBTY to enhance its presence in key markets."

The deal, which is subject to approval by Zila's shareholders, is expected to close in October 2006.

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