Tags: GNC | Seek | Sale | Company | IPO

GNC Said to Seek $2 Billion Sale of Company as It Pursues IPO

Tuesday, 05 Oct 2010 03:51 PM

GNC Holdings Inc., the vitamin and nutrition-supplement retail chain, is seeking bidders for a possible sale of the company that may fetch about $2 billion, according to three people familiar with the matter.

Goldman Sachs Group Inc. and JPMorgan Chase & Co. are helping GNC search for a buyer as well as prepare the Pittsburgh-based company for a possible initial public offering, said the people, who declined to be identified because the talks are private. The sale process, which began in recent weeks, is in the early stages, they said.

Bright Food Group Co., one of China’s largest food and dairy producers, is among companies that expressed interest in GNC and signed a confidentiality agreement, the people said. GNC and Shanghai-based Bright Food agreed this year to form a joint venture that will help GNC enter the Chinese market. GNC has more than 7,100 stores globally, adding about 400 in the past year while other retailers closed locations or limited growth.

The company, which sells store-brand vitamins and Muscle Milk protein mix, is pursuing a sale as concern about a faltering economic recovery leads companies to withdraw or postpone IPO plans. Last week, the chain filed with the U.S. Securities and Exchange Commission for a $350 million share sale. Goldman and JPMorgan are underwriting the offering.

Spokeswomen for Goldman and JPMorgan declined to comment. Greg Miller, a spokesman for GNC, and Jimmy Kiang, a financial adviser to Bright Food, also declined to comment.

GNC Owners

Ares Management LLC and the investment arm of the Ontario Teachers’ Pension Plan bought GNC in 2007 for $1.65 billion from private-equity fund Apollo Management LP. Apollo twice tried to take GNC public and withdrew its plans amid faltering sales and unfavorable market conditions.

GNC advisers have also reached out to private-equity funds to gauge their interest in buying the company, the people with knowledge of the matter said.

This year, almost 50 companies have delayed or withdrawn IPOs in the U.S., according to data compiled by Bloomberg. Liberty Mutual Agency Corp. was among the most recent, postponing the largest IPO of 2010 because demand was less than the company had projected. The Boston-based insurer was seeking to raise almost $1.3 billion.

Bright Food is looking at acquisitions that will expand its sales outside of China and said last month it is in talks about a possible takeover of the U.K.’s United Biscuits from Blackstone Group and PAI Partners. Bright Food was outbid in July for Australian sugar refiner CSR Ltd.

GNC Earnings

GNC was founded in 1935 as General Nutrition Companies. It was a publicly traded company until 1999 and has since been owned by various private-equity funds. The chain’s largest market outside the U.S. is Mexico, where it has 352 stores.

GNC’s net income rose to $51.1 million in the first six months of the year from $37.4 million in the same period a year earlier, according to the company’s SEC filing. Revenue increased 5.5 percent to $920.7 million. In all of 2009, GNC posted earnings before interest, taxes, depreciation and amortization of $227.7 million on revenue of $1.71 billion.

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GNC Holdings Inc., the vitamin and nutrition-supplement retail chain, is seeking bidders for a possible sale of the company that may fetch about $2 billion, according to three people familiar with the matter.Goldman Sachs Group Inc. and JPMorgan Chase Co. are helping GNC...
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Tuesday, 05 Oct 2010 03:51 PM
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