Newly private NBTY replaces long-time CEO Scott Rudolph with Jeffrey Nagel, a company outsider and supplement industry newcomer.

The Carlyle Group, which closed its $4 billion leveraged buyout of NBTY Oct. 1, brought Nagel in to "support and enhance the management team," said NBTY President and Chief Financial Officer Harvey Kamil.

"Carlyle believes we need people with additional organizational skills," Kamil said in an interview.

NBTY CEO Jeffrey Nagel

NBTY announced its change at the top slot, effective immediately, Dec. 6. Rudolph, whose father Arthur founded NBTY as Nature's Bounty Inc. in 1971, maintains his post as chairman of the Ronkonkoma, N.Y.-based company.

Nagel is a 13-year veteran of General Electric, where he most recently led its Oil & Gas Global Services division, based in Florence, Italy. Previously, he was president and CEO of GE Inspection Technologies and also held leadership positions in the industrial giant's aircraft engines and home electric products businesses.

Nutritionals Neophyte

In a same-day statement, Rudolph called Nagel "a world-class manager with a proven track record of success."

NBTY is not concerned that Nagel's success came in sectors far removed from dietary supplements, Kamil said.

"There's no question he certainly does not know the industry," Kamil allowed, adding the rest of NBTY's management will help acquaint Nagel with the dietary supplement landscape.

Though Carlyle early on expressed interest in keeping Rudolph and the rest of NBTY senior management in place, Kamil said changes were expected (Also see "Carlyle Group's $3.8B Bid For NBTY Could Face Competition" - Pink Sheet, 19 July, 2010.).

Nagel's background in energy and technology is not a surprise, given Carlyle's private equity investments.

"Carlyle believes we need people with additional organizational skills."

– NBTY President Kamil

As of Sept. 30, the energy sector comprises 23% of Carlyle's current assets under management. In comparison, the consumer products industry makes up just 8% of its portfolio, and NBTY marked Carlyle's first true supplement segment play.

NBTY reported strong third-quarter financials in July, its final quarterly earnings report as a publicly traded company, including 44% growth in net income to $66 million (Also see "NBTY Advertising Drives 44% Income Growth Ahead of Carlyle Acquisition" - Pink Sheet, 2 August, 2010.).

However, Rudolph at the time warned private label competition would continue pressuring the profit margins of NBTY's branded supplements, which include Nature's Bounty, Solgar and Rexall.

By Dan Schiff

NBTY Appoints GE Vet To Succeed CEO Rudolph

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