TPG scores exit with $1.2bn Bayer deal

The sale of vitamin maker Schiff is expected to produce a healthy return for TPG's growth arm, which helped to bring in a new management team and led two add-on acquisitions.

TPG Growth is poised to exit its 25 percent stake in Schiff Nutrition International.

Bayer HealthCare will acquire the vitamin and nutritional company for $34 per share, an amount that values Schiff at approximately $1.2 billion, according to a statement.  The deal is expected to close by the end of 2012.

TPG acquired its stake in Schiff for $48.8 million in 2010. The firm has not disclosed a multiple on its exit.

The firm had a hand in a number of operational improvements over the life of the investment, according to a source with knowledge of the transaction. TPG brought in a new management team, including talent from other consumer packaged goods companies, and also led two add-on acquisitions. Schiff acquired Ganeden Biotech last year, and Airborne was purchased for $150 million in March.

The changes contributed to Schiff’s adjusted EBITDA increasing by 81 percent over the previous year last quarter, according to the source. Forecasted revenue for the 2013 fiscal year is projected at 45 percent.

TPG had raised $2 billion for its second growth fund as of August, according to a Bloomberg report. The firm’s previous growth fund, called TPG Star, was generating a 1.3x multiple and 14.14 percent net internal rate of return as of 31 March, according to a Washington State Investment Board report.

TPG Growth II has a 2 percent management fee on committed capital up to $1 billion and a 1.5 percent fee on committed capital in excess of $1 billion, according to New Jersey State Investment Council documents dated 22 March. William McGlashan, Matthew Hobart, Ransom Langford and Scott Gilbertson are listed as key investment professionals on the fund.