Carlyle Group to buy NBTY for $3.8 Billion

Carlyle Group to buy NBTY for $3.8 Billion

Carlyle Group to buy NBTY for $3.8 Billion

Private-equity firm Carlyle Group has agreed to buy vitamin and nutritional supplements maker NBTY Inc. for $3.8 billion, in what would be the year's largest transaction to take a public company private.

NBTY, based in Ronkonkoma, N.Y., on Long Island, was formerly known as Nature's Bounty and sells products under a variety of brands including Solgar, Rexall and MET-Rx.

Carlyle agreed to buy NBTY for $55.00 a share, a premium of approximately 57% over NBTY's average closing share price during the 30 trading days ended July 14.

Carlyle's purchase of NBTY is among a relatively small number of recent deals to take public companies private. Lately, sales of companies from one buyout shop to another have been more popular.

One reason for the large premium for NBTY is that other private-equity groups expressed a keen interest in the company, including a teamed-up Bain Capital and Blackstone Group; and Apollo Global Management.

There is a go-shop provision in the deal, meaning that the company has about a month to solicit other proposals.

Washington, D.C.-based Carlyle is expected to pay about $1.4 billion in equity to fund the purchase and borrow the rest. The transaction has fully committed financing from Bank of America Merrill Lynch, Barclays Capital and Credit Suisse. BofA Merrill Lynch also advised NBTY on the deal, along with Centerview Partners LLC and law firm Sullivan & Cromwell LLP.

NBTY has roughly $450 million in existing debt on its balance sheet.

NBTY employs 14,000 and had 2009 revenue of $2.6 billion. Roughly 60% of the company's revenue comes from sales of its products to retailers such as Wal-Mart Inc. and Target Corp. NBTY also operates retail stores in several continents, including about 440 Vitamin World stores in the U.S. and 537 Holland & Barrett stores in Europe.