GNC Corp is again being acquired by a private equity firm. The largest global specialty retailer of nutritional products and specialty supplements is being acquired by Ares Management and the Ontario Teachers’ Pension Plan.
The two firms have signed a definitive agreement to acquire the Pittsburgh, Pennsylvania-based company from an affiliate of Apollo Management for $1.65 billion in cash.
Apollo had failed to take GNC public twice after acquiring the company for $750 million from Royal Numico, a Dutch baby food maker, in 2003. Its last attempt, in August 2006, would have netted Apollo $252 million if successful; Apollo would also have reduced its stake to 58 percent from 97 percent.
Thomas H. Lee did not have much luck in taking GNC public, either. It acquired the company for $362 million in 1989 and tried to list about half its stake in GNC for nearly the same amount in 1995, but failed. Thomas H. Lee finally sold GNC to Royal Numico for $2.5 billion in 1999, including the assumption of $760 million in debt.
GNC’s new owners, Ares Management and Teachers’ Private Capital, have worked together before. In 2005, they bought National Bedding Co, which makes Serta mattresses.
Ares Management and Teachers’ Private Capital were represented by Proskauer Rose. GNC was represented by Gardere Wynne Sewell as lead counsel and by Morgan Lewis as special counsel. Goldman Sachs and JPMorgan were financial advisers to GNC.
For the twelve months ending September 30, 2006, GNC reported sales of $1.5 billion. It has more than 4,800 retail stores in the US and franchise operations in 46 countries.