Nutraceutical Partners with Dr. Raphael Kellman

Nutraceutical Corporation Partners with Microbiome Medicine Pioneer and Author Dr. Raphael Kellman, MD

Dr. Kellman

PARK CITY, Utah, Aug. 30, 2018 /PRNewswire/ — Nutraceutical Corporation is pleased to announce that Dr. Raphael Kellman, MD will be advising the company in the development and promotion of its Solaray® Mycrobiome® Probiotic line of products. Dr. Kellman is a best-selling author and physician of integrative and functional medicine and is considered to be the father of modern microbiome medicine. “This is a partnership between two pioneers,” says Chad Clawson, CEO of Nutraceutical. “Dr. Kellman has been and continues to lead the advancement of modern microbiome medicine, and Nutraceutical has been a pioneer in the creation and advancement of the entire nutritional supplement industry and the variety of products and choices available to consumers.

“Nutraceutical is the top seller by unit volume of supplements in the US health food channel, where its Solaray® Mycrobiome® line of products are the fastest growing probiotic line*. Mycrobiome® probiotics are specially formulated for age and condition-specific needs using multiple strains at clinically significant doses and feature Enteric Shield® capsules to allow the probiotics to survive harsh stomach acid. According to Nutraceutical CEO Chad Clawson, “Solaray® Mycrobiome® supplements, which I personally believe are the best probiotics on the market today, demonstrate our company’s commitment to research, innovation, and quality manufacturing to assure we deliver the best possible supplements to consumers.”

Dr. KellmanSolaray® Mycrobiome® probiotics include the following 6 once-daily formulas: Urgent Care 100 Billion 24 Strain, Women’s Formula 50 Billion 24 Strain, Men’s Formula 30 Billion 24 Strain, Adult 50+ Formula 30 Billion 18 Strain, Weight Formula 50 Billion 18 Strain, and Colon Formula 50 Billion 18 Strain. New line extensions are anticipated this Fall and through 2019 based on research and clinical experience. In addition, the new Mycrobiome® probiotics are Vegan, Gluten-Free, Non-GMO, formulated at Clinical Potencies, and deliver Multiple-Strain formulas. Finally, Solaray® offers a unique Enteric Shield® VegCap that delivers guaranteed protection of the probiotics from stomach acid, protection not found in most popular probiotics on the market today.

Max F. Willis, VP of Marketing and Education at Nutraceutical, states: “We are pleased to partner with Dr. Kellman, who coined the term ‘Microbiome Medicine’ and has written many best-selling books, including: ‘The Microbiome Diet,’ ‘Gut Reaction’ and ‘The Whole Brain.’ Dr. Kellman has demonstrated through his highly sought-after integrative microbiome practice how balancing the human microbiome can provide real solutions to many health concerns. Dr. Kellman will provide us with his expertise and guidance for the Mycrobiome® probiotic line of products, based on his successful clinical experience.”

Dr. Kellman states: “I am thrilled to be on board with the Solaray team. Their innovative, targeted probiotics are truly a breakthrough. When I recommend precisely which probiotics are needed to support my patients’ microbiome, the results are astounding. Not only does their health dramatically improve – so does their mood, weight, skin, and most of all their overall vitality and zest for life;all from the power of probiotics. That is what ‘Microbiome Medicine’ is all about. I coined that term because no two microbiomes are the same. We all have different needs, different health goals. And now, in partnership with Solaray, we can achieve even more innovation together. The results will truly be ‘frontier medicine.'”

Raphael Kellman, MD, graduate of Albert Einstein College of Medicine, pioneered a groundbreaking new brand of medicine and healing. He seamlessly integrates holistic and functional medicine with his visionary understanding of the world and nature, the root of who we are and its connection to health and healing. Dr. Kellman was the first doctor to recognize the profound importance of the microbiome; he speaks on the topic around the world and literally coined the term “Microbiome Medicine.”

Nutraceutical Corporation, one of the nation’s largest producers and marketers of nutritional supplements, personal care and healthy foods sold in health and natural food stores, was incorporated in 1993. Nutraceutical has the #1 unit market share in US Health Food Specialty * with over 30 brands of dietary supplements and 4,000 SKUs in Solaray®, Zhou®, KAL®, Heritage Store®, LifeFlo®, Dynamic Health®, Zand®, and much more. Based in Park City, Utah, Nutraceutical has operations nation-wide and globally. Through its own in-house laboratory, Sustainable Labs®, Nutraceutical can assure that only the highest quality raw materials are used in production. Nutraceutical takes pride in operating the highest quality cGMP production facilities in Utah, where it makes most of its own products, rather than relying on third-party manufacturers as many other brands do. www.nutraceutical.com

Nutraceutical Provides Response to California AG Litigation

Park City, Utah, June 7 2018/PRNewswire/ — Nutraceutical Corporation today announced the following response to a press release issued earlier today by the California Attorney General’s office (the “California AG”) and several California counties regarding a lawsuit filed against Nutraceutical relating to the Peaceful Planet Plant Proteins Toddler Supreme protein supplement.

The California AG first contacted Nutraceutical on Friday, June 1st and Nutraceutical promptly informed the California AG the last sales of this product into California were made in February 2018 and that it voluntarily suspended any further sales pending completion of its own investigation. Nutraceutical informed the California AG that it has an opinion from a respected former FDA toxicologist that the Toddler Supreme protein supplement in fact contains ingredient levels that comply with applicable laws and regulation and does not pose any safety risk to Nutraceutical’s customers. Nutraceutical offered to supply the California AG with a formal written opinion from the former FDA toxicologist confirming that the Toddler Supreme protein supplement is safe, does not pose safety risks to Nutraceutical customers, and correcting the numerous factual errors in the California AG’s analysis of the product, but the California AG declined to wait to receive the information before moving forward with its lawsuit. Nutraceutical remains fully committed to the safety of its customers and their children, and intends to vigorously contest the lawsuit as it is believed to be without merit.

HGGC Completes Acquisition of Nutraceutical

Company Founder Frank W. Gay II to Retire; Succeeded by New CEO Chad J. Clawson

PARK CITY, Utah, Aug. 23, 2017 /PRNewswire/ — Nutraceutical International Corporation (NASDAQ: NUTR) (“Nutraceutical” or the “Company”) today announced that HGGC, a leading middle-market private equity firm, has completed its previously announced acquisition of the company for $41.80 per share in cash. The transaction was originally announced on May 22, 2017, and was approved by Nutraceutical’s shareholders on August 21, 2017.

With the completion of the transaction, Nutraceutical’s common stock will cease trading and no longer be listed on the NASDAQ Stock Exchange.

“We are excited to complete our investment in this great company, and we look forward to working with the Nutraceutical team in its next phase of growth and evolution,” said Les Brown, Managing Director and COO of HGGC, who becomes Executive Chairman of the Company. “We are confident there is a tremendous opportunity for the company to continue to build on its strong market position and to bring more great products to its loyal customers.”

Concurrent with the closing of the transaction, Nutraceutical founder, Chairman and CEO, Frank W. “Bill” Gay II announces his retirement after leading the company for nearly 25 years. He is succeeded as CEO by Chad J. Clawson.

“Since founding Nutraceutical with other key management 24 years ago, I have decided it’s time to spend more time with family and supporting some causes I care about. I truly will miss other members of the Nutraceutical management team, our hard-working employees and all our loyal customers,” Gay said. “This is a tremendous company and industry, and I will look back fondly on my years at Nutraceutical. I believe that HGGC is the best partner we could have hoped to find and that Nutraceutical’s best days are yet to come.”

“We have endless appreciation for what Bill Gay has accomplished with Nutraceutical, not only building an incredible company, but also truly helping to shape and professionalize the natural products industry,” said Steve Young, Co-Founder and Managing Director of HGGC. “We, at HGGC, and Chad are committed to upholding the high standard Bill has set, and we wish him the best for a well-deserved retirement.”

Clawson has had an exceptional career as a Senior Operating Executive, including serving as President of Manufacturing and Distribution at Nutraceutical from 1999 to 2005. He comes to Nutraceutical from Service Experts, one of the largest HVAC equipment and service providers in North America, where he held the position of Chief Officer of Operational Excellence.

About Nutraceutical International Corporation

Nutraceutical is an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores.  Internationally, Nutraceutical markets and distributes branded nutritional supplements and other natural products to and through health and natural product distributors and retailers.  Nutraceutical’s core business strategy is to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements.  Nutraceutical believes that the consolidation and integration of these acquired businesses provides ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships.

Nutraceutical manufactures and sells nutritional supplements and other natural products under numerous brands, including Solaray®, KAL®, Dynamic Health®, Nature’s Life®, LifeTime®, Natural Balance®, NaturalCare®, Health from the Sun®, Zhou Nutrition®, Pioneer®, Nutra BioGenesis®, Life-flo®, Organix South®, Heritage Store® and Monarch Nutraceuticals®.

Nutraceutical owns neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom’s Natural Foods™, Cornucopia Community Market™ and Granola’s®.  Nutraceutical also owns health food stores, which operate under the trade name Fresh Vitamins®.

Nutraceutical manufactures and/or distributes one of the broadest branded product lines in the industry, with approximately 7,500 SKUs, including approximately 750 SKUs exclusively sold internationally.  Nutraceutical believes that, as a result of its emphasis on innovation, quality, loyalty, education and customer service, its brands are widely recognized in health and natural food stores and among their customers.

About HGGC

HGGC is a leading middle-market private equity firm with $4.3 billion in cumulative capital commitments. Based in Palo Alto, Calif., HGGC is distinguished by its “Advantaged Investing” model that enables the firm to source and acquire scalable businesses at attractive multiples through partnerships with management teams, founders and sponsors who reinvest alongside HGGC, creating a strong alignment of interests. Over its history, HGGC has completed more than 75 platform investments, add-on acquisitions, recapitalizations and liquidity events with an aggregate transaction value of more than $14 billion. More information is available at www.hggc.com.

FAQs About Pending Transaction with HGGC

Nutraceutical International Corporation and its subsidiaries (“Nutraceutical” or the “Company”) recently announced that it entered into an Agreement and Plan of Merger (the “Merger Agreement”) with an affiliate of HGGC, LLC (“Buyer” or “HGGC”). This communication is intended to address certain questions that employees, customers, suppliers, investors and others may have regarding this announced transaction (the “Transaction”) and the closing of the Transaction (the “Closing”).

 

OVERVIEW OF TRANSACTION

 

What exactly is the Transaction?

Nutraceutical will be acquired by an affiliate of HGGC in a transaction valued at approximately $446 million, including debt to be refinanced. Under the terms of the Merger 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 May 19, 2017, the last full trading day before today’s announcement, and a 15.6% premium to the Company’s all-time high closing stock price.

What is the general process that leads up to Closing and when will Closing occur?

As of May 21, 2017, Nutraceutical and Buyer have signed a Merger Agreement. What happens next is that Nutraceutical has to find out if any third party wants to make a superior or better offer that maximizes stockholder value. This period (referred to as a “go shop” period) lasts for approximately 60 days. At the end of the go shop period, if no superior offer has been submitted, then the potential Transaction with Buyer will be submitted for approval to Nutraceutical’s stockholders. Assuming that the stockholders approve the Transaction (required minimum vote to approve is a majority of outstanding shares), then Closing would occur promptly thereafter. Absent a superior offer during the go shop period, Closing is expected to occur by the end of our fiscal fourth quarter.

Will Nutraceutical remain a public company?

If and when the Transaction is complete with HGGC, Nutraceutical will no longer be a public company. The surviving entity will be owned by an affiliate of HGGC.

Does this announcement mean the sale is final?

The Transaction is subject to customary closing conditions, including the approval of stockholders and the expiration or termination of the waiting period under the Hart-Scott Rodino Act. The closing of the Transaction will only take place after expiration of the go shop period. Nutraceutical expects the Transaction to close by the end of our fiscal fourth quarter.

How can I learn more about HGGC?

Visit www.hggc.com. HGGC is a leading middle-market private equity firm with $4.3 billion in cumulative capital commitments. It has completed over 60 portfolio investments and transactions with a total enterprise value of over $12 billion.

 

FOR EMPLOYEES

 

What will happen to my salary following the Closing?

The announcement and the Closing itself have no effect on employee salaries.

What happens to my benefits?

Nutraceutical’s current benefit plans will remain in place and operate without change through the Closing. We understand that employees have questions about the compensation and benefit programs that will be available following the Closing. Please keep in mind that we are very early in the process and do not have all the answers at this point. We will be working closely with the HGGC team on the plans and programs that will be offered to employees following Closing and will provide more information as soon as possible once decisions are made. At this time, we expect Nutraceutical’s benefit plans to remain in place through the end of the 2017 calendar year (December 31, 2017), even though we anticipate that the Closing will occur by the end of our fiscal fourth quarter.

 

POTENTIAL EFFECT OF TRANSACTION

 

How will the Transaction affect customers and consumers?

This announcement does nothing to change the Company’s brands or its discount or sales programs or its ongoing support of and focus on the Healthy Foods Channel. Customers will continue to be able to purchase the same brands and products as before and will interact with the same experienced Nutraceutical team members who have assisted them in the past. Following closing, Nutraceutical will operate as an independent company led by its own management team, which will include many members of the existing management team. Customers can continue to count on the same people they know and trust and a team who is dedicated to ongoing improvement of customer relationships and helping customers grow their businesses and succeed.

How will the Transaction affect stockholders?

If the Transaction moves forward, stockholders will be given the opportunity to vote for or against the Transaction. The approval of the Merger requires the vote of a majority of the outstanding shares. If the Merger is approved, then stockholders (other than dissenting stockholders, if any) will receive payment in exchange for their shares based on the agreed per share price.

Where can I get more information about the Transaction?

In connection with the Merger, the Company plans to file with the Securities and Exchange Commission and furnish its stockholders a proxy statement. A preliminary proxy statement is expected to be filed with the Securities and Exchange Commission within 30 days, and under the Merger Agreement, the Company will mail the definitive proxy statement to stockholders sometime following the 45th day after the date of the Merger Agreement. Additionally, the Company will file other relevant materials with the Securities and Exchange Commission in connection with the proposed Transaction.

The materials to be filed by the Company with the Securities and Exchange Commission may be obtained free of charge at the Securities and Exchange Commission’s web site at www.sec.gov. In addition, stockholders also may obtain free copies of the proxy statement from the Company by contacting Nutraceutical Investor Relations at 1400 Kearns Blvd., 2nd Floor, Park City, UT 84060, telephone number (435) 655-6106 or investor@nutraceutical.com. INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED MERGER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND THE PARTIES TO THE MERGER.

 

Additional Information and Where to Find It

The Company will furnish to the Securities and Exchange Commission a report on Form 8-K regarding the proposed transactions described in this document (this “FAQ”), which will include the merger agreement. All parties desiring details regarding the merger are urged to review these documents, which will be available at the Securities and Exchange Commission’s web site at www.sec.gov.

In connection with the merger, the Company plans to file with the Securities and Exchange Commission and furnish its stockholders a proxy statement. Additionally, the Company will file other relevant materials with the Securities and Exchange Commission in connection with the proposed transaction. The materials to be filed by the Company with the Securities and Exchange Commission may be obtained free of charge at the Securities and Exchange Commission’s web site at www.sec.gov. In addition, stockholders also may obtain free copies of the proxy statement from the Company by contacting Nutraceutical Investor Relations at 1400 Kearns Blvd., 2nd Floor, Park City, UT 84060, telephone number (435) 655-6106 or investor@nutraceutical.com. INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT AND THE OTHER RELEVANT MATERIALS WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY VOTING OR INVESTMENT DECISION WITH RESPECT TO THE PROPOSED MERGER BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER AND THE PARTIES TO THE MERGER.

This FAQ is neither a solicitation of proxy, an offer to purchase nor a solicitation of an offer to sell any securities and it is not a substitute for any proxy statement or other filings that may be made with the Securities and Exchange Commission should the merger proceed.

 

Participants in the Solicitation

The Company and its directors, executive officers and other members of their management and employees, under the Securities and Exchange Commission rules, may be deemed to be participants in the solicitation of proxies of the Company’s stockholders in connection with the proposed merger. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of certain of the Company’s executive officers and directors in the solicitation by reading the Company’s proxy statement for its 2017 annual meeting of stockholders and the proxy statement and other relevant materials which may be filed with the Securities and Exchange Commission in connection with the merger when and if they become available. Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, will be set forth in the proxy statement relating to the merger when and if it becomes available. Additional information regarding the Company’s executive officers and directors in the solicitation is available by reading the Company’s proxy statement for its 2017 annual meeting of stockholders.

 

Forward Looking Statements

Any statements in this FAQ about future events or future results, the expected timing of the completion of the proposed merger and the ability to complete the proposed merger, and other statements containing the words “estimates,” “believes,” “anticipates,” “plans,” “expects,” “will,” and similar expressions, other than historical facts, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The actual results of the merger could vary materially as a result of a number of factors, including, but not limited to: (i) the possibility that competing offers will be made; (ii) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; and (iii) the inability to complete the proposed merger due to the failure to obtain stockholder approval for the proposed merger or the failure to satisfy other conditions to completion of the proposed merger. Other factors that may cause actual results to differ materially include those set forth in the reports that Nutraceutical files from time to time with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended September 30, 2016 and quarterly and current reports on Form 10-Q and 8-K. These forward-looking statements reflect Nutraceutical’s expectations as of the date of this FAQ. Nutraceutical undertakes no obligation to update the information provided herein. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date hereof.

Nutraceutical Agrees To Be Acquired By HGGC

PARK CITY, Utah, May 22, 2017 /PRNewswire/ — Nutraceutical International Corporation (NASDAQ: NUTR) (“Nutraceutical” or the “Company”) and HGGC, LLC (“HGGC”), a leading middle-market private equity firm, today announced that they have entered into a definitive agreement under which Nutraceutical will be acquired by an affiliate of HGGC in a transaction valued at approximately $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 May 19, 2017, the last full trading day before today’s announcement, and a 15.6% premium to the Company’s all-time high closing stock price.

“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,” said Bill Gay, Chairman and Chief Executive Officer of Nutraceutical. “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.”

Rich Lawson, Co-founder and Chief Executive Officer of HGGC, said “We congratulate the management team and employees of Nutraceutical for building an industry-leading nutritional supplement business, and we look forward to working with the Nutraceutical team to continue to pursue growth opportunities globally.”

“Nutraceutical is an impressive company with a diverse portfolio of brands and thousands of satisfied retail customers, as well as millions of loyal consumers who rely on its products,” commented Les Brown, Managing Director and Chief Operating Officer of HGGC. “Nutraceutical is a great example of a successful roll-up strategy carried out with consistency and dedication over the last 25 years.  We have long admired their disciplined market approach, which has allowed the Company to consistently generate strong financial returns and positive cash flow.”

The agreement has been unanimously approved by Nutraceutical’s board of directors, acting on the recommendation of a special committee of independent and disinterested directors.  The special committee negotiated the terms of the agreement with the assistance of its financial and legal advisors.

The Company will undertake a 60-day “go-shop” period, commencing immediately, during which the special committee, with the assistance of its financial and legal advisors, will actively solicit, evaluate and potentially enter into negotiations with parties who offer alternative proposals. There can be no assurance that this process will result in a superior offer or that any other transaction will be approved or completed.  The Company does not expect to disclose developments with respect to the solicitation process unless and until the special committee has made a decision with respect to any potential superior proposal.

The transaction, which is expected to close in the second half of 2017, is subject to customary closing conditions, including Company stockholder approval and the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.  There are no financing conditions associated with the transaction.  Bill Gay and Jeff Hinrichs, Chief Operating Officer and Executive Vice President of the Company, who own approximately 7.9% and 2.5% of the Company’s outstanding common stock, respectively, have entered into customary voting agreements pursuant to which they have agreed to vote all of their shares in favor of the transaction.

Peter J. Solomon Company is acting as financial and strategic advisor to the Company and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as its counsel. Piper Jaffray & Co. is acting as financial advisor to HGGC and Kirkland & Ellis LLP is acting as its counsel.

ABOUT NUTRACEUTICAL

Nutraceutical is an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores.  Internationally, Nutraceutical markets and distributes branded nutritional supplements and other natural products to and through health and natural product distributors and retailers.  Nutraceutical’s core business strategy is to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements.  Nutraceutical believes that the consolidation and integration of these acquired businesses provides ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships.

Nutraceutical manufactures and sells nutritional supplements and other natural products under numerous brands, including Solaray®, KAL®, Dynamic Health®, Nature’s Life®, LifeTime®, Natural Balance®, NaturalCare®, Health from the Sun®, Zhou Nutrition®,  Pioneer®, Nutra BioGenesis®, Life-flo®, Organix South®, Heritage Store® and Monarch Nutraceuticals®.

Nutraceutical owns neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom’s Natural Foods™, Cornucopia Community Market™ and Granola’s®.  Nutraceutical also owns health food stores, which operate under the trade name Fresh Vitamins®.

Nutraceutical manufactures and/or distributes one of the broadest branded product lines in the industry, with approximately 7,500 SKUs, including approximately 750 SKUs exclusively sold internationally.  Nutraceutical believes that, as a result of its emphasis on innovation, quality, loyalty, education and customer service, its brands are widely recognized in health and natural food stores and among their customers.

ABOUT HGGC

HGGC is a leading middle-market private equity firm with over $4.25 billion in cumulative capital commitments.  Based in Palo Alto, California, HGGC is distinguished by its Advantaged Investing strategy that is designed to enable the firm to source and acquire scalable businesses at attractive multiples through partnerships with management teams, founders and sponsors who reinvest alongside HGGC, creating a strong alignment of interests.  Over its history, HGGC has completed more than 60 platform investments, add-on acquisitions, recapitalizations and liquidity events with an aggregate transaction value of more than $12 billion.  More information, including a complete list of current and former portfolio companies, is available at www.hggc.com.

Additional Information and Where to Find It

The Company will furnish to the Securities and Exchange Commission a report on Form 8-K regarding the proposed transactions described in this press release, which will include the merger agreement. All parties desiring details regarding the merger are urged to review these documents, which will be available at the Securities and Exchange Commission’s web site at www.sec.gov.

In connection with the merger, the Company plans to file with the Securities and Exchange Commission and furnish its stockholders a proxy statement.  Additionally, the Company will file other relevant materials with the Securities and Exchange Commission in connection with the proposed transaction. The materials to be filed by the Company with the Securities and Exchange Commission may be obtained free of charge at the Securities and Exchange Commission’s web site at www.sec.gov.  In addition, stockholders also may obtain free copies of the proxy statement from the Company by contacting Nutraceutical Investor Relations at 1400 Kearns Blvd., 2nd Floor, Park City, UT  84060, telephone number (435) 655-6106  or investor@nutraceutical.com.  Investors and STOCKHOLDERS of the Company are urged to read the proxy statement and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed merger because they will contain important information about the merger and the parties to the merger.

This press release is neither a solicitation of proxy, an offer to purchase nor a solicitation of an offer to sell any securities and it is not a substitute for any proxy statement or other filings that may be made with the Securities and Exchange Commission should the merger proceed.

Participants in the Solicitation

The Company and its directors, executive officers and other members of their management and employees, under the Securities and Exchange Commission rules, may be deemed to be participants in the solicitation of proxies of the Company’s stockholders in connection with the proposed merger. Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of certain of the Company’s executive officers and directors in the solicitation by reading the Company’s proxy statement for its 2017 annual meeting of stockholders and the proxy statement and other relevant materials which may be filed with the Securities and Exchange Commission in connection with the merger when and if they become available. Information concerning the interests of the Company’s participants in the solicitation, which may, in some cases, be different than those of the Company’s stockholders generally, will be set forth in the proxy statement relating to the merger when and if it becomes available. Additional information regarding the Company’s executive officers and directors in the solicitation is available by reading the Company’s proxy statement for its 2017 annual meeting of stockholders.

Forward Looking Statements

Any statements in this press release about future events or future results, the expected timing of the completion of the proposed merger and the ability to complete the proposed merger, and other statements containing the words “estimates,” “believes,” “anticipates,” “plans,” “expects,” “will,” and similar expressions, other than historical facts, constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The actual results of the merger could vary materially as a result of a number of factors, including, but not limited to: (i) the possibility that competing offers will be made; (ii) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; and (iii) the inability to complete the proposed merger due to the failure to obtain stockholder approval for the proposed merger or the failure to satisfy other conditions to completion of the proposed merger. Other factors that may cause actual results to differ materially include those set forth in the reports that Nutraceutical files from time to time with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended September 30, 2016 and quarterly and current reports on Form 10-Q and 8-K. These forward-looking statements reflect Nutraceutical’s expectations as of the date of this press release. Nutraceutical undertakes no obligation to update the information provided herein.  These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date hereof.

Nutraceutical Announces Acquisition

PARK CITY, Utah, April 6, 2017/PRNewswire/-Nutraceutical International Corporation (NASDAQ: NUTR) today announced that it has acquired substantially all the assets associated with the Zhou Nutrition brand from Branson Books, LLC. The purchase price was approximately $19.7 million in cash. Zhou Nutrition sells its line of 24 proprietary dietary supplement products on its own website (www.zhounutrition.com) and via other Internet retailers.

According to Frank W. Gay II, chairman and chief executive officer, “We are excited to acquire a brand that is focused exclusively on the e-commerce and direct-to-consumer space. The founders of Zhou Nutrition have created a set of amazing products and built a very strong consumer base through their expertise in e-commerce. We look forward to working with them to continue to grow this exclusive e-commerce brand by introducing more supplement, personal care and healthy food products under the brand. This will complement our existing core business, which is to support and grow our other brands that are sold into other market segments, such as the health food channel.”

ABOUT NUTRACEUTICAL

We are an integrated manufacturer, marketer, distributor and retailer of branded nutritional supplements and other natural products sold primarily to and through domestic health and natural food stores. Internationally, we market and distribute branded nutritional supplements and other natural products to and through health and natural product distributors and retailers. Our core business strategy is to acquire, integrate and operate businesses in the natural products industry that manufacture, market and distribute branded nutritional supplements. We believe that the consolidation and integration of these acquired businesses provides ongoing financial synergies through increased scale and market penetration, as well as strengthened customer relationships.

We manufacture and sell nutritional supplements and other natural products under numerous brands, including Solaray®, KAL®, Dynamic Health®, Nature’s Life®, LifeTime®, Natural Balance®, NaturalCare®, Health from the Sun®, Pioneer®, Nutra BioGenesis®, Life-flo®, Organix South®, Heritage Store® and Monarch Nutraceuticals®.

We own neighborhood natural food markets, which operate under the trade names The Real Food Company™, Thom’s Natural Foods™, Cornucopia Community Market™ and Granola’s®. We also own health food stores, which operate under the trade name Fresh Vitamins®.

We manufacture and/or distribute one of the broadest branded product lines in the industry, with approximately 7,500 SKUs, including approximately 750 SKUs exclusively sold internationally. We believe that, as a result of our emphasis on innovation, quality, loyalty, education and customer service, our brands are widely recognized in health and natural food stores and among their customers.

This Press Release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to our financial condition, results of operations and business. These forward-looking statements can be identified by the use of terms such as “believe,” “expects,” “plan,” “intend,” “may,” “will,” “should,” “can,” or “anticipates,” or the negative thereof, or variations thereon, or comparable terminology, or by discussions of strategy. These statements involve known and unknown risks, uncertainties and other factors that may cause industry trends or our actual results to be materially different from any future results expressed or implied by these statements. Important factors that may cause our results to differ from these forward-looking statements include, but are not limited to: (i) changes in or new government regulations or increased enforcement of the same, including adverse determinations by regulators; (ii) unavailability of desirable acquisitions, inability to complete them or inability to integrate them; (iii) increased costs, including from increased raw material or energy prices; (iv) changes in general worldwide economic or political conditions; (v) adverse publicity or negative consumer perception regarding nutritional supplements; (vi) issues with obtaining raw materials of adequate quality or quantity; (vii) litigation and claims, including product liability, intellectual property and other types; (viii) disruptions from or following acquisitions including the loss of customers; (ix) increased competition; (x) slow or negative growth in the nutritional supplement industry or the healthy foods channel; (xi) the loss of key personnel or the inability to manage our operations efficiently; (xii) problems with information management systems, manufacturing efficiencies and operations, including system interruptions and security/cybersecurity breaches; (xiii) insurance coverage issues; (xiv) the volatility of the stock market generally and of our stock specifically; (xv) increases in the cost of borrowings or unavailability of additional debt or equity capital, or both, or fluctuations in foreign currencies; and (xvi) interruption of business or negative impact on sales and earnings due to acts of God, acts of war, terrorism, bio-terrorism, civil unrest and other factors outside of our control. Copies of our SEC reports are available upon request from our investor relations department or may be obtained at the SEC’s website (www.sec.gov).

Additional Information about Prop 65

Proposition 65

Many California residents are familiar with a law known as Proposition 65, also known as the Safe Drinking Water and Toxic Enforcement Act of 1986 or Prop 65. This law mandates that warnings be given to consumers in various circumstances. California residents see these warnings nearly everywhere — at gas stations, in parking garages, in hotel lobbies and on various consumer products.

The original concept of Prop 65 was to keep chemicals out of drinking water and to warn consumers before they are exposed to chemicals that may cause cancer, birth defects, or other reproductive harm. The California Office of Environmental Health Hazard Assessment (OEHHA) is responsible for publishing this list of chemicals and establishing the exposure levels that require warning statements. There are over 800 chemicals on the Prop 65 list. For example, under Prop 65 an exposure to an amount of lead over 15 micrograms per day requires a cancer warning, while an exposure to an amount of lead over 0.5 micrograms per day would require a reproductive toxicity warning. The level requiring a reproductive toxicity warning is set at a level 1000 times less than the level of exposure where there is no observable effect of harm, a level which is far lower than that set by the EPA or any federal agency. The vast majority of Prop 65 cases involving dietary supplements concern allegations of lead exposure.

WARNING STATEMENTS

When a warning statement is required on a consumer product, including a dietary supplement, it usually reads as follows:

For a carcinogen: ⚠ WARNING: Cancer — www.P65Warnings.ca.gov

For a reproductive toxin: ⚠ WARNING: Reproductive Harm — www.P65Warnings.ca.gov

ENFORCEMENT OF PROP 65

Violations of Prop 65 are enforced by the California Attorney General, District Attorneys or by private party “bounty hunters” who are authorized to recover and keep part of the civil penalties recovered through a trial or settlement. As a result of the financial incentive offered to private parties to pursue these cases, lawyers and law firms have become “bounty hunters” and devoted their practices to pursuing settlements and recoveries. In a Prop 65 case, the only allegation is that the company failed to provide a warning – there is no claim that anyone has been harmed by the product at issue. There have been numerous Prop 65 cases and settlements involving dietary supplements.

Most Prop 65 cases settle prior to trial because the company bears the burden of proof to establish that a warning is not required on its products. In 2011, settlements with private party “bounty hunters” totaled over $15 million dollars – of which over $11 million was paid to the lawyers for the “bounty hunters.”

PROBLEMS WITH PROP 65

There have been several critiques leveled against Prop 65. Here are a few:

  • Prop 65 Unfairly Impacts Natural Products: Products with synthetic ingredients or which are heavily processed can more easily avoid introducing or remove natural contaminants. This unfairly impacts natural products. According to the Alliance for Natural Health, a grass-roots consumer group that seeks to promote health freedom in the United States,

 

“Some Prop 65 Chemicals are prevalent in the natural environment, and they unavoidably end up in supplements that contain natural ingredients. While there are certain allowable “safe harbor” levels for Prop 65 chemicals in a product, these levels are often either extremely low or must be established through complicated and expensive lab testing at the expense of the supplement company. Prop 65 does provide an exemption for “naturally occurring” chemicals – but it is up to the supplement company to prove that this is the case, which is both very difficult and expensive. In the end, supplement companies have the unfortunate choice of providing a prominent warning on what might in actuality be a very safe supplement, or not provide warning at all and risk noncompliance with Prop 65.” (A Guide to California’s Proposition 65, 2012).

  • The Prop 65 Bounty Hunter System is Broken: An article by Jim Conran, former director of the California Department of Consumer Affairs, claims that It’s Time to Tame Prop 65 Bounty Hunters, pointing out that what started out as an environmental protection law has turned into a system that mainly seems to enrich private lawyers. A March 2012 law journal article entitled Bounty Hunters and the Public Interest – A Study of Proposition 65 reviews Prop 65 actions and settlements and argues that the law has been abused by private bounty hunters and the California Attorney General should more actively oversee enforcement of the law.
  • Prop 65 Hurts Small Businesses: The group Citizens Against Lawsuit Abuse believes prop 65 enforcement actions are an abusive practice hurting small businesses.

NUTRACEUTICAL’S COMPLIANCE PROGRAM

Nutraceutical has an active Prop 65 compliance program, which includes the following elements:

Brochures: Nutraceutical has distributed to its California retailers brochures that include information about Prop 65 for consumers, including a warning. The latest version of that brochure is available at www.nutraceutical.com/notices.

Posters: Nutraceutical has distributed posters to all its retail consumers in California. Like the brochures, these posters provide a clear and reasonable Prop 65 warning to California consumers. Nutraceutical has asked that its retailers place these posters in their store(s) at prominent locations so that consumers can see them.

Warning Labels: Nutraceutical has applied Prop 65 warning labels to various products on the labels.

MORE INFORMATION ON PROP 65

For more information on Prop 65, please see the following links:

https://oehha.ca.gov/proposition-65 – The California Office of Environmental Health Hazard Assessment publishes an overview of Prop 65 on the website. OEHHA also is responsible for publishing the list of Prop 65 chemicals. These lists are available at the foregoing link.

Office of the Attorney General – The Attorney General’s website contains a database of Prop 65 notices of violation and settlements at http://oag.ca.gov/prop65.

 

*The views stated in the articles are not necessarily the views of Nutraceutical, its directors, officers or employees.

California Prop 65 Warning

For cancer and reproductive toxicity endpoints: ⚠ WARNING: Cancer and Reproductive Harm — www.P65Warnings.ca.gov

 

Click here to return to the Notices page.

BSE

There has been a significant amount of media attention paid recently to Bovine Spongiform Encephalopathy (BSE) or “mad cow disease.” Concerns have been raised about various food products in the marketplace, including dietary supplements, and their potential connection to a variant of Creutzfeldt-Jakob Disease (vCJD) that appears to be caused by BSE.

No one knows for sure how BSE first emerged, but it does appear that certain 20th century farming practices have helped to spread it. News reports indicate that the United States Department of Agriculture (USDA) and the Food and Drug Administration (FDA) are attempting to keep BSE out of the United States, even though there is currently no reliable test to detect BSE in a live animal. To date, we are aware of only one reported case of BSE in the United States. Various experts have expressed their view that the United States has enough safeguards in place to prevent a widespread outbreak.

As a leading manufacturer of dietary supplements, Nutraceutical Corporation (Nutraceutical) endeavors to assure that ingredients used in its products are of the highest quality and are carefully selected. As part of this commitment, Nutraceutical has instituted measures to ensure that it purchases bovine material only from suppliers that provide written certifications of their procedures regarding BSE. While the specific procedures vary by ingredient and supplier, examples of some of the procedures that have been instituted by such suppliers include:

  • Where possible, limiting the purchase of bovine material from countries where BSE has either not been detected or where enforcement and surveillance programs are well developed and enforced;
  • Process and control systems in sourcing and packaging;
  • Compliance with government surveillance programs; and
  • Compliance with other applicable regulations and guidelines, including those of the FDA, the European Commission and other governing bodies.

We believe that one of the most important steps that can be taken is for the FDA, the USDA, and other U.S. government agencies to commit the funds to research BSE and develop the testing methodology to allow all of us to ensure that the U.S. food supply remains BSE free. We urge our customers to write their congressmen to encourage the government to continue to give the highest priority to this matter.

The information contained in this statement is provided for educational purposes only and is current as of the date of publication. Although reasonable efforts have been made to provide accurate information, there is no guarantee that all of the information is accurate or current.

©2004 Nutraceutical Corporation. All rights reserved.

Answers to Questions About Kava Kava (Piper methesticum)

Historical Uses of Kava

Kava Kava – also known simply as kava – originated in the islands of the South Pacific, where it has been used for centuries as a ceremonial and communal drink. A member of the black pepper family, kava’s active properties appear to stem from the kavalactones found in its roots, which are dried and pounded into a powder and then mixed into a beverage. More recently, kava has become popular as a dietary supplement, either in capsule form (often using extracts from the roots) or as a beverage. Kava is best known for promoting relaxation.

Recent Government Actions

In recent months, there have been news reports regarding actions about kava by government agencies in various countries. Reports of liver-related risks associated with the use of kava have prompted regulatory agencies in countries including Germany, Switzerland, France, Canada and the United Kingdom to take actions ranging from warning consumers about the potential risks of kava to removing kava-containing products from the marketplace.

Germany has been at the forefront of these activities, and in early 2002 the German government announced a nearly complete ban on the sale of kava herbal medicines in Germany. Under the ruling, the sale of kava is only allowed in homeopathic products that contain minute amounts of kava. The chief herbal authority in Germany – the German Commission E – was apparently not consulted on the German government’s investigations. Recently, the German Commission E issued a press release indicating that it has reviewed available scientific data on the efficacy of kava and assessed the risk/benefit ratio and the therapeutic advantages, and determined that it continues to support kava’s availability as prescribed in medical product. The Commission also indicated it is of the opinion that there is no imminent danger which justified the German government’s action.

FDA Statements

In the United States, the FDA has issued a Consumer Advisory indicating that although liver damage appears to be rare, the FDA believes consumers should be informed of this potential risk.

The FDA has indicated that persons who have liver disease or liver problems, or persons who are taking drug products that can affect the liver, should consult a physician before using kava-containing supplements. The FDA has also stated that consumers who use a kava-containing dietary supplement and who experience signs of illness associated with liver disease should consult their physician. Symptoms of serious liver disease include jaundice (yellowing of the skin or whites of the eyes) and brown urine. Non-specfic symptoms of liver disease can include nausea, vomiting, light-colored stools, unusual tiredness, weakness, stomach or abdominal pain, and loss of appetite.

The FDA has indicated that it is continuing its investigation into the relationship, if any, between the use of kava-containing dietary supplements and liver injury. The agency’s investigation includes attempting to determine a biological explanation for the relationship and to identify the different sources of kava in the U.S. and Europe. The agency has indicated that it will alert consumers, and if warranted, take additional action as more information becomes available.

Industry Reaction in the U.S.

In the United States, there are two primary trade organizations involved with the manufacture and sale of herbal products: the Council for Responsible Nutrition (CRN) an the American Herbal Products Association (AHPA).  CRN is a science-based trade association for the dietary supplement industry that promotes responsible self-regulation, and AHPA is a trade association devoted to the U.S. herbal supplement industry.

In response to news reports about kava, both CRN and AHPA investigated the situation and developed cautionary statements for kava-containing dietary supplements. The CRN-sanctioned cautionary statement reads as follows:

Caution: The US FDA advises that a potential risk of rare, but severe liver injury may be associated with kava-containing dietary supplements. Ask a health care professional before use if you have or have had liver problems, frequently use alcoholic beverages, or are taking any medication. Stop use and see a doctor if you develop symptoms that may signal liver problems, including jaundice (yellowing of the skin or whites of the eyes) and brown urine. Other nonspecific symptoms can include nausea, vomiting, light-colored stools, unusual tiredness, weakness, stomach or abdominal pain, and loss of appetite. Not for use by persons under 18 years of age, or by pregnant or breastfeeding women. Not for use with alcoholic beverages. Excessive use, or use with products that cause drowsiness, may impair your ability to operate a vehicle or heavy equipment.

CRN provided this statement to the FDA, an on July 22, 2002, the FDA sent a letter to CRN indicating that it believes that CRN’s caution statement regarding kava-containing dietary supplements is useful in providing information to consumers about liver injury and can assist consumers in making decisions and choices about dietary supplements.

Nutraceutical Products

Nutraceutical Corporation is a manufacturer of a variety of nutritional supplements, including products that contain kava. Nutraceutical cooperated with CRN and AHPA in developing new caution statements and has adopted the CRN statement.

Nutraceutical Corporation is committed to providing consumers with dietary supplement and natural food products that are of the highest quality and use carefully selected ingredients. Nutraceutical markets its products under various brand names, including Solaray®, KAL®, NaturalMax®, VegLife® and others. If you have any questions or concerns pertaining to kava-containing dietary supplements, please visit our website at www.nutraceutical.com/notices. Additional information may be found at www.crn.org or www.ahpa.org.

The information contained in this statement is provided for educational purpose and is current as of the date of publication. Although reasonable efforts have been made to provide accurate information, there is no guarantee that all of the information is accurate or current.

©2002 Nutraceutical Corporation. All rights reserved.