Nutraceutical Hits All-Time High After Premium Buyout Deal

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Shares of Nutraceutical International Corp. (NASDAQ: NUTR) saw a massive gain early on Monday after it was announced that the company would be acquired by HGGC, a middle-market private equity firm. The company is expected to close the transaction in the second half of 2017.

So far in 2017, excluding Monday’s move, the stock is actually down about 20%. However, in the past 52 weeks the stock is up 26%. So HGGC might be getting a better deal buying now with the stock closer to the lower end of its range.

The transaction is valued at roughly $446 million, including debt to be refinanced. Under the terms of the agreement, Nutraceutical stockholders will receive $41.80 in cash (without interest) for each outstanding share of Nutraceutical common stock they own, which represents a 49% premium to the company’s closing stock price on Friday. This also represents a 15.6% premium to the all-time high closing stock price.

The deal was unanimously approved Nutraceutical’s board of directors.

Bill Gay, board chair and chief executive of Nutraceutical, commented:

We are pleased to announce this transaction, which delivers significant value to our stockholders, many of whom have been with us since our initial IPO in 1998. We are excited to be joining forces with HGGC, which is a world-class private equity firm.  HGGC’s expertise in formulating strategic growth plans for middle-market companies will be a great platform for the future of Nutraceutical.  We expect that the combination of HGGC’s strategic insights and the deep industry experience and knowledge of our management team will help us continue to build and grow.  We remain committed to our employees and their families, to our customers, to our world-wide consumers and to the natural products industry.  Our management team is looking forward to working with HGGC to pursue the next chapter of our successful story.  We especially want to thank our employees for their years of dedication and hard work.  We truly believe that HGGC will be a great partner as we go forward as a private company.

Shares of Nutraceutical were last seen up nearly 50% at $41.95 on Monday, with a consensus analyst price target of $29.00 and a 52-week trading range of $22.03 to $42.40.