Helen of Troy (HELE - Snapshot Report) is geared to enter the vitamins, minerals and supplements (VMS) category with the takeover of U.S. based retailer and health publisher Healthy Directions, LLC and its subsidiaries in a cash transaction worth $195 million. The deal is expected to be closed in the second quarter of fiscal 2014. Healthy Directions will continue to be based in Bethesda, Marylandafter the close of acquisition. The company’s management team will also continue post acquisition.
The Healthy Directions acquisition is expected to be accretive to revenues by more than 10% on an annualized basis and also affect cash flow, adjusted EBITDA and adjusted earnings per share positively.
Healthy Directions will bring with it several highly acclaimed physicians and nutritional experts in heart health, digestive health, joint health, skin care and vision support.
The future of the VMC business seems bright because according to Nutrition Business Journal, the VMS market is expected to continue growing at a mid-to-high single digit rate annually through 2020. Moreover, as per market research by the journal, more than 70% of U.S population, aged 55+, took vitamin supplements in 2013.
Moreover, as per the U.S. Census Bureau’s national population forecast, is expected to grow more than 50% between 2012 and 2025. Moreover, the Census projects that the number of people above the age of 75 years will grow more than 40% during the same period.
The acquisition of Healthy Directions is a strategic fit for Helen of Troy as it is geared to bolster its presence in the health and wellness category. In this regard, the consumer products company acquired Kaz in Dec 2010 and PUR a year later from The Procter & Gamble Company (PG - Analyst Report).
J.P. Morgan Securities LLC of JPMorgan Chase & Company (JPM - Analyst Report) was the financial advisor to Helen of Troy on the acquisition of Healthy Directions. Moreover, JPMorgan Chase Bank, N.A. and Bank of America, N.A. of Bank of America Corporation (BAC - Analyst Report) will finance the takeover.