Portfolio News

Castanea Partners Announces Investments in Health Resources and Vitamin Research Products

Creates Platform Through Integration of Leading Direct Marketers of Branded Nutritional Supplements

Newton, MA – February 2, 2010 - Castanea Partners announced today that it has made investments in two direct marketers of branded nutritional supplements: Health Resources, based in Hueytown, Alabama, and Vitamin Research Products, based in Carson City, Nevada. Castanea Partners plans to combine the two businesses, creating a vertically-integrated platform in the nutritional supplement industry. The consolidated company will have multiple unique brands marketed to distinct and highly loyal consumer segments.

“Uniting Health Resources and Vitamin Research Products is a terrific investment opportunity that fits our strategy well,” said Robert Smith, co-Managing Partner of Castanea. “Rob (Watson) and Layne (Lowery) have been very successful in building their distinctive brands. Their respective backgrounds and expertise are highly complementary. Both companies are at a stage in their development where Castanea’s deep experience in premium, branded multichannel marketing can add value to the combination of these two businesses and in pursuing the opportunities the resulting platform will create.”

“We have been looking to invest in the nutritional supplement industry for a number of years,” noted Troy Stanfield, Partner for Castanea. “The market has grown consistently through the economic cycle, and consumers are increasingly placing a premium on branded, differentiated products from companies that control their own quality and production. The combination of Vitamin Research Products and Health Resources aligns nicely with these trends and should enable the integrated business to capitalize on opportunities in the industry.”

Health Resources, founded in 1995, is a leading marketer of high-quality nutritional supplements based on scientific research. Castanea’s investment will also include the company’s True Health brand. Through both brands Health Resources markets its products to consumers through direct mail and the Internet. With a targeted product portfolio focused on the latest developments in nutritional supplement research, it has built a large and growing following among consumers. Health Resources’ disciplined approach to direct-to-consumer marketing has enabled it to consistently acquire and retain customers at an attractive return-on-investment.

Founded in 1979, Vitamin Research Products develops, manufactures, and markets premium nutritional supplements. The company sells over 350 science-based supplements using only the highest quality ingredients. The company’s products are sold via direct mail and the Internet to consumers and practitioners. The combined organization will benefit from the in-house manufacturing and new product development capabilities of Vitamin Research Products.

“Castanea’s extensive operating experience in direct marketing and premium consumer brands made them our preferred choice when it came to selecting a partner,” said Layne Lowery, CEO of Health Resources.

Added Rob Watson, CEO of Vitamin Research Products, “As we continue to expand and integrate our respective businesses, Castanea will help us realize exciting new growth opportunities and employ the best practices of each company across a larger business platform.”

Health Resources and Vitamin Research Products have complementary assets that together create a more profitable entity with the resources to invest in superior organic and acquisition-driven growth opportunities. Castanea will support the companies as they continue to grow their respective brands while leveraging product development and direct marketing capabilities across multiple customer segments. Health Resources co-founder and CEO Layne Lowery and Vitamin Research Products CEO Robert Watson will remain with the business and become co-CEOs of the combined organization.

Health Resources was advised by Imperial Capital. Terms of the transaction were not disclosed.

About Castanea

Castanea Partners is a private equity firm that invests in small and middle market companies in education, information, marketing services, consumer brands, and specialty retail. The firm has extensive operating and private equity investment experience in these sectors and, working closely with management, seeks to optimize business performance and realize attractive returns.

Castanea participates in leveraged buyouts, growth and acquisition equity investments, and operationally challenging situations. The firm is currently investing from its third fund, a $575 million fund that targets companies with enterprise values up to $250 million.

For more information, visit www.castaneapartners.com or contact Andrew Collina at 617.630.2441 or acollina@castaneapartners.com.


All company, brand, or product names contained in this document may be trademarks or registered trademarks of their respective holders.

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