Columbia West Capital News
01.09.09 Canadian firm, Atrium Innovations, acquires Nutri-Health

Excerpt from Phoenix Business Journal

Dismal economic conditions fueled by a lack of global access to capital hindered overall activity in mergers and acquisitions in 2008, but they did not stifle one Northern Arizona company’s sale last week.

Cottonwood-based Nutri-Health Supplements LLC was acquired by Canadian public company Atrium Innovations Inc. for $23.9 million. The deal also includes two potential earn-out payments based on operating cash-flow performance in 2009 and 2010.

NHS develops, manufactures and markets probiotic and enzyme products for the digestive and immune systems. The company markets its products primarily through direct mail, but also distributes brands through specialized retail outlets such as Hi-Health and Sunflower Market, as well as health care practitioners.

Scottsdale-based Columbia West Capital LLC was NHS’ exclusive financial adviser in the cash purchase, which closed Dec. 31.

The Nutri-Health purchase is in line with Quebec-based Atrium’s strategy of acquiring growth technology companies that create nutritional products. It also paves Atrium’s entrance into the direct-to-consumer market, where NHS does 90 percent of its business.

Since being acquired in 2006 and placed under the leadership of CEO Fred Auzenne and President Tracy King, NHS has more than doubled its revenue. In 2008, the company had record sales of $28 million, following a successful 2007 ($17 million) and 2006 ($14 million). During that time, its staff of 30 grew to more than 80.

“They really transformed the company,” Atrium President Pierre Fitzgibbon said in a Jan. 5 analyst conference call.

Auzenne, King and a small group of investors raised $7.4 million shortly after acquiring NHS in 2006. They used the funding to improve operational practices and make capital improvements such as phone and intranet integration, streamlining e-commerce, automating inventory and upgrading its information technology platform.

Atrium officials do not plan to change management, though Auzenne said he will relinquish his title after a two-year transition period to work on other projects for the company. The 22,000-square-foot Cottonwood facility and its employees will not be affected.

“Moving the production facility is not on our agenda,” Fitzgibbon said of the Cottonwood site, which is about 80 miles north of metro Phoenix.

The nutritional supplement industry is growing, accounting for $22.4 billion in sales in 2007, according to Nutrition Business Journal. More than 100 million Americans take at least one nutritional supplement.

NHS probiotic products retail for $39.95 for a one-month supply of 60 capsules.

Nutri-Health Supplements LLC

Description: Develops, manufactures and markets probiotic and enzyme products for the digestive and immune systems
Brands: Nutri-Health, Sedona Labs, Meta Foods and Sedona Labs Pro
sales: $27 million in 2007 ,
HQ: Cottonwood
CEO: Fred Auzenne
Employees: 80-plus
Web: www.nutri-health.com, www.atrium-innov.com