In a bid to boost its health supplement offerings, HealthCentral.com Thursday grabbed
Vitamins.com for $103.5 million in stock.
The number of shares to be issued will be based upon the average closing
price of HealthCentral.com’s common stock for the 10 trading days prior to
one day before the closing date. Based on HealthCentral.com’s recent trading
price of $7 per share, approximately 14.8 million shares would be issued if
this price per share remained constant, resulting in 36 percent of the fully
diluted shares of the combined companies.
Upon completion of the deal, HealthCentral.com (HCEN)
will gain about 200,000 Vitamins.com online clients. Vitamins.com
also has a mail order business with an additional 175,000 active customers
that purchased products in 1999, and demonstration and retail stores.
HealthCentral plans to use the clicks and bricks strategy to expand its
reach and brand awareness. Vitamins.com’s product lines will be integrated
into HealthCentral.com’s online drugstore, HealthCentralRx.com, increasing
current offerings from 23,000 to 31,000 SKUs, 5,000 of which will represent
prescription drugs and 26,000 of which will include health, beauty,
wellness, personal care, vitamins, minerals, supplements and other products.
Robert Haft, president and chief executive officer of Vitamins.com, will continue to serve as
president of the new wholly owned subsidiary. In his career, he has opened
more than 600 new retail stores and brings to HealthCentral.com a team of
e-commerce retailing experts.
“American consumers are projected to spend $16.6 billion in 2003 for
vitamins, minerals and supplements due to the rising popularity of
alternative medicines and therapies, and we are now poised to take advantage
of this market opportunity,” said HealthCentral.com President and Chief Executive
Officer Albert Greene.
“Combining our product portfolios will provide consumers with an enhanced
and personalized shopping experience and adds an additional
‘bricks-and-mortar’ legitimacy to our e-pharmacy business.”