North Castle, Golden Gate in $650m recap

The recapitalisation of vitamin maker Leiner Health Products includes the sale of North Castle's majority stake, yielding the firm about three times capital invested.

Greenwich, Connecticut-based North Castle Partners and San Francisco-based Golden Gate Capital have announced a $650 million (€550 million) recapitalisation of Leiner Health Products.

The recap involves the sale of North Castle's stake of more than 80 percent in the company, an investment the firm made from its Fund I in 1997. According to a press statement, North Castle will realize a return of approximately three times capital with an IRR of 17 percent for the seven-year holding period.

Also, as part of the recap, Golden Gate and a new 'fund investment vehicle' managed by North Castle will co-sponsor an investment of approximately $265 million (€224 million) into Leiner, which manufactures store-brand vitamins, nutritional supplements and over-the-counter drugs.

North Castle has invested more than $800 million to date in more than 40 companies in the 'healthy living and aging' marketplace, which includes fitness clubs, alternative medicines and vitamin supplements.

Golden Gate manages approximately $700 million of capital, which the firm invests in change-intensive, growth businesses. In March, Golden Gate participated in the $250 million (€206 million) series B financing for speciality pharmaceutical company Jazz Pharmaceuticals, which is one of the largest second-round fundings on records for a niche drug company without any commercialized products.