NBTY, Inc. bags a trophy in its brand hunt by bringing in-house Dr. Organic Ltd.’s skin-care line, which the Ronkonkoma, N.Y.-based supplement and wellness-product manufacturer already sells at its U.K. and U.S. retail chains.

The Carlyle Group-owned firm, formerly Nature's Bounty, Inc., bills itself as the largest nutritional-supplement manufacturer and distributor in the U.S. The acquisition announced Aug. 17 is another step for the company into the beauty and personal-care space that NBTY says represents a natural extension of its business.

Financial terms of the transaction were not disclosed, but media reports place the price at around £55 million ($86 million). NBTY’s purchase of the line, already sold under the Dr. Organic brand in its U.K. Holland & Barrett chain since 2008 and as Organic Doctor in its U.S. Vitamin World stores exclusively since 2013, is anticipated to close later this year.

"We believe the acquisition will allow us to accelerate NBTY’s entry into the mass-market beauty and skin-care category, particularly in the U.S., an area which we believe can be an important growth engine for our business." – President and CEO Steve Cahillane

The deal includes Dr. Organic/Organic Doctor body-care gels, creams and extracts made of organic raw material. Every product in the Organic Doctor range contains at least 70% organic ingredients, the minimum organic threshold for cosmetic products under California law, which has been cited in false-advertising suits against brands including Vogue International's Organix line, renamed OGX under a related settlement in 2013 Also see "NAD Sends Vogue Back To Drawing Board For OGX Packaging, Claims" - HBW Insight, 27 May, 2015..

The brand's ingredient-based collections include Organic Aloe Vera, Organic Manuka Honey, Organic Royal Jelly and Organic Snail Gel, among others, comprising products ranging from facial cleansers and anti-aging treatments to shampoo and deodorant.

Organic Doctor emphasizes use of ingredients found in nature with recognized health benefits.

"For centuries the indigenous populations of many countries and cultures around the world have used what nature has provided to ensure health and vitality. From the humble Tea Tree of Australia, used by aborigines for over one thousand years; Manuka of New Zealand and the Maori; to the ancient Egyptians with Aloe Vera; the natural world has provided us with a host of health giving botanicals," which Organic Doctor incorporates in its personal-care items, according to the brand's website.

The acquisition helps diversify NBTY's branded offerings, which consist mostly of wellness products and vitamins and supplements under names including Nature’s Bounty, Osteo Bi-Flex, Pure Protein, Solgar and Sundown Naturals.

NBTY will expand distribution of the Dr. Organic/Organic Doctor line to drive sales growth. Some of the broader distribution will be in European markets outside of the U.K. as it transitions the Holland & Barrett brand to its chains in Belgium, Ireland and the Netherlands.

“We believe the acquisition will allow us to accelerate NBTY’s entry into the mass-market beauty and skin-care category, particularly in the U.S., an area which we believe can be an important growth engine for our business,” says President and CEO Steve Cahillane.

The firm noted it already is tapping into the personal-care market with it Nature’s Bounty Optimal Solutions line of health, wellness and beauty supplements and vitamins, recently expanded with the introduction of a gummy vitamin for women that contains calcium and vitamins D and B for bone and immune health and energy support and 50 mg of collagen to “support a healthy, strong and beautiful body” ([A#05150615003]).

“We're very focused on the wellness space. We're very focused on innovating inside of our brands. We've gone with Optimal Solutions more toward ethical beauty and so we're elbowing out a little bit,” Cahillane said in the firm’s recent quarterly earnings briefing.

On Aug. 6, NBTY said that as it increases its focus on its brands and retail businesses, which represent about 80% of its business and growing, it will move out of contract manufacturing and make private label a smaller part of its overall business ([A#05150817001]).

NBTY reported third-quarter sales for its consumer products group of $476 million, up 1% versus the prior-year period, driven by a $20 million increase in branded products sales but offset by a $14 million decline in private-label and contract-manufacturing revenues.

The Vitamin World U.S. chain and other North American retail operations declined 9%, with same-store sales off 6.3% due to declines in weight-loss product sales and a “soft mall-based retail environment.”

Dr. Organic co-owners Fred Whitcomb and Steve Quinn also grew their branded product revenues through acquisitions. In 2013 they acquired Optima Consumer Health Ltd., which marketed brands such as Aloe Pura, Aloe Dent and Health Perception via multi-channel international distribution. Whitcomb and Quinn had launched Optima Consumer in 1995 to meet growing demand for aloe vera-based health products before selling it to the William Ransom Group in 2005.

NBTY Advances Into Personal-Care Space With Organic Doctor Acquisition

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