After selling his family’s vitamin company to Japanese soy sauce giant Kikkoman Corp. two years ago, Ryan Drexler took a break before deciding whether to jump back into the business.
Drexler, a 10-year L.A. resident and investor, is now making a $117 million bid for a large, publicly held Utah nutritional supplement company he contends is poorly run. Last week, he announced a $10.75-per-share offer to shareholders of Park City-based Nutraceutical International Corp., whose brands include Solaray, KAL and Natra-Bio.
“There’s a tremendous opportunity in this sector but this is a company that has basically bought sales by buying up other companies and then hasn’t done anything to grow them organically,” said Drexler, 38. “I can certainly do better.”
Drexler first approached Nutraceutical International’s leadership in July after acquiring 3 percent of shares over a 10-month period. The board turned him down then, and reiterated its lack of interest in a statement a day after his Aug. 19 announcement.
But the entrepreneur, who served as chief executive of Country Life Vitamins until its sale to Kikkoman after a two-year joint venture, is undaunted. Drexler’s offer was wasn’t much of a premium to the $10.70 the company’s stock closed at prior to his announcement, but he said he can unlock a lot more value in the company than current management.
“This is a company that should be trading five times EBITDA instead of three and a half,” he said of Nutraceutical International, which has a $123 million market cap. “This is a touchy-feely business, and there are simple things that they should be doing, such as just showing up at trade shows, that would make a big difference. We bought sales at Country Life, but we knew how to grow them, too.”
Anticipating a fight, Drexler has hired Sitrick and Co., a Century City public relations firms specializing in corporate representation and crisis management.
Nutraceutical International did not return calls for comment, but its Aug. 20 statement stated that Drexler’s offer was “not in the best interests of Nutraceutical’s stockholders.”
Center Branches Out
California Cancer Specialists Medical Group Inc., comprising more than 100 specialists mostly affiliated with City of Hope in Duarte and Huntington Memorial Hospital in Pasadena, recently opened its first free-standing multispecialty cancer center in South Pasadena.
The South Pasadena Cancer Center is located at the old headquarters of Cogent Inc., a tech company, and is just a few blocks from its first home on the Huntington Memorial campus, which now houses the medical group’s in-patient practice.
But the spalike look and feel of the 22,000-square-foot facility is light years away from both the tech company it replaced and the sterile feel of the old hospital cancer center.
The center, which cost $8.4 million to renovate and equip, is decorated in deep colors with wood floors and stone counter surfaces. The facility is five stories high for a good reason – so that its often frail patients can quickly enter from the nearby parking lot, hop into the elevator and arrive at a reception area without wandering the halls from department to department.
“We thought a lot about how we wanted to design this center for patient convenience and better care,” said Chief Operating Officer Vincent Jensen. “We now have all the tools to be a true community center with all the state-of-the-art equipment you would find in an academic center.”
Dr. Helen Chin, a San Gabriel Valley native recently recruited as medical director for radiation oncology, said having her department so close to other treatment services for the first time is a dream come true.
“Treating cancer has to be a team approach,” Chin said.
Herbalife Acquires Factory
Herbalife Ltd., which traditionally has relied on contractors to produce its weight-loss shakes, nutritional supplements and skin care products, announced last week that it will buy a Lake Forest plant to strengthen manufacturing capabilities.
The L.A. direct-marketing company said it is buying the assets from Micelle Laboratories, a contract manufacturer of food and nutritional supplements. Financial terms were not disclosed.
All 72 full-time and 20 part-time staff at the Orange County facility will be offered the opportunity to become part of Herbalife after the deal closes, which the company said is anticipated in the next 60 days.
Reporter Deborah Crowe can be reached [email protected] or at (323) 549-5225, ext. 232.
