Reckitt Benckiser inks deal to acquire Schiff Nutrition for $1.4 bln

Reckitt Benckiser Group Plc has agreed to buy Schiff Nutrition International Inc in a transaction worth the dietary supplements maker for about $1.4 billion.

Its board has approved the offer of $42 a share in cash and will recommend its investors tender their shares, England-based Company said.

When the offer was announced on November 15, it valued Schiff at about 28 times earnings before interest, taxes, depreciation and amortization and represented 81% premium to Schiff’s share price on October 26, before Bayer’s offer.

Reckitt Benckiser’s counterbid for Salt Lake City-based Schiff, the maker of Move Free  joint-care pills, Tiger’s Milk nutrition bars and MegaRed Omega-3 supplements, exceeded Bayer’s offer of  about $1.1 billion. 

The purchase of  Schiff will follow a string of acquisitions since 2006, including Adams Respiratory Therapeutics Inc and SLL  International Plc, the maker of Scholl foot products.

 The company Reckitt Benckiser will finance its purchase with cash and current credit facilities and also expects the tender offer to close before the end of the year. 

Bayer, headquartered in Leverkusen, Germany had agreed to acquire Schiff for $34 a share. 

Reckitt Benckiser started an unsolicited tender offer for Schiff on Nov 16 and on Nov 20, Bayer said it will not raise its bid for Schiff as the price would have been too high.  

Reckitt Benckiser’s offer valued Schiff about 28 times Ebidta.  Morgan Stanley is providing financial assistance to Reckitt Benckiser.  Schiff was advised by bankers including Bank of America Merril Lynch,  Rothschild and Houlihan Lokey .  

Reckitt Benckiser Plc is a British multinational consumer goods company based in Slough, UK. It is the largest producer of household cleaning products and is also a major producer of consumer healthcare and personal  products.  

Schiff Nutrition International Inc is a leading nutritional supplement company offering over 400 SKUs in vitamins, nutritional supplements and nutrition bars in the U.S. and throughout the world.