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North Castle Partners and Golden Gate Capital Recapitalize Leiner Health Products in $650 Million Deal

Strategic Insights

— 2 min read

North Castle Partners and Golden Gate Capital announced a $650 million recapitalization of Leiner Health Products, a leading manufacturer of vitamins, nutritional supplements, and over-the-counter drugs. The deal marks a significant milestone for the company, which has seen significant growth under North Castle's ownership. The recapitalization will provide Leiner with additional capital and strategic expertise to drive further expansion in the rapidly growing health and wellness market.

Key Takeaways:

  • North Castle Partners and Golden Gate Capital have invested $265 million in Leiner Health Products as part of a $650 million recapitalization deal.
  • The deal will return approximately 3 times invested capital with an IRR of 17% for the 7-year holding period for North Castle Fund I.
  • Leiner's management team will retain a significant ownership stake in the company, with Robert Kaminski continuing as CEO.
  • The company has implemented a series of initiatives under North Castle's ownership, including focusing its customer and product portfolio, expanding into OTCs and contract manufacturing, and streamlining working capital management.
  • Leiner has leading market positions in private label vitamins and OTC sales in the mass-market channel, with products sold through over 30,000 outlets in the U.S.
  • The company has recently launched new products in fast-growing VMS and OTC categories, which have become top sellers in leading food, drug, mass-market, and club stores.

Statistics:

  • $650 million: The total value of the recapitalization deal between North Castle Partners and Golden Gate Capital.
  • $265 million: The amount invested by Golden Gate Capital and a new fund investment vehicle managed by North Castle.
  • 17%: The IRR achieved by North Castle Fund I over a 7-year holding period.
  • 3: The number of times invested capital will return for North Castle Fund I.
  • 7: The number of years North Castle Fund I held an investment in Leiner Health Products.
  • 1997: The year North Castle Fund I made its original investment in Leiner Health Products.
  • 27 billion: The number of doses produced by Leiner Health Products in the last year.
  • 40,000: The number of food, drug, club, and mass merchants that sell Leiner's products.
  • 3,000: The number of products provided by Leiner to its retailers to create extraordinary store brands at bargain prices.

Sources:

  • PRNewswire: "North Castle Partners and Golden Gate Capital Announce Recapitalization of Leiner Health Products" (April 21)
  • North Castle Partners: http://www.northcastlepartners.com/
  • Golden Gate Capital: http://www.goldengatecap.com/
  • Leiner Health Products: http://www.leiner.com/

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