Airborne, Inc. Acquired by Schiff Nutrition for $150 Million Cash

SALT LAKE CITY–(BUSINESS WIRE)–Schiff Nutrition International, Inc., (NYSE: WNI), acquired Airborne, Inc., a leading provider of immune support products on March 30, 2012 for $150 million in cash, subject to certain adjustments.

“Schiff is focused on building premium brands and leading innovation,” stated Tarang Amin, president and chief executive officer. “We are excited about the Airborne acquisition, which fits well with our strategy and establishes Schiff as a leader in the immune support segment. Airborne is a strong brand and will make an excellent addition to Schiff’s portfolio, and we plan to leverage our science, innovation, marketing and sales capabilities to further its growth.”

Airborne develops and sells innovative dietary supplements throughout the United States and Canada, as well as online. Its Airborne health formula is designed to support customers’ immune systems through its unique combination of vitamins, nutrients and proprietary blend of herbal extracts. Its immune support products include iconic effervescent tablets, new chewable tablets and on-the-go packets, all in a variety of flavors. Airborne can be visited online at www.airbornehealth.com.

Marti Morfitt, Airborne, Inc.’s chief executive officer, stated: “I am very proud of the work the Airborne team has done over the past three years to re-establish the growth of the brand and to develop a strong pipeline of new products and marketing programs designed to support the future growth of the business. We are happy to see our business move to the team at Schiff – they bring great talent and resources to the business and share our passion for building a leading immune support brand.”

“Schiff intends to couple Airborne’s leading brand and product portfolio with our strong capabilities in science and innovation,” continued Amin. “For example, there has been promising scientific research into the potential relationship between BC30, the proprietary probiotics technology we acquired rights to last year, and supporting the immune system. We are currently conducting a study with Dr. Glenn R. Gibson at The University of Reading in the UK on the effects of BC30 on the immune function of healthy elderly persons. This is but one of the many potential opportunities to bring science and innovation to Airborne.”

Terms of Deal and Financial Impact

Under the terms of the purchase agreement, Schiff acquired 100% of Airborne’s stock from GF Capital Private Equity Fund, LP for $150 million, subject to certain adjustments. Schiff funded the all-cash transaction through a combination of a new debt facility and cash on its balance sheet.

Airborne, Inc. generated net revenue of approximately $70 million for the twelve months ended February 29, 2012. Preliminarily, the company expects to recognize transaction related costs of approximately $4.5 million in fiscal 2012, of which $0.9 million was recognized during the third fiscal quarter.

The transaction is expected to become accretive during the first half of fiscal year 2014. The company is in the process of finalizing its overall cost of capital, completing its valuation of the acquired business, including allocation of purchase price to primarily intangible assets, and determining the expected timing of certain synergies. Management expects to further address the overall impact of the acquisition on its financial results and future outlook when it announces its fourth quarter and fiscal 2012 financial results.

Houlihan Lokey acted as financial advisor to Schiff in connection with the transaction.

Conference Call Information

Schiff will hold a conference call today, April 2nd, at 1:00 p.m. ET. The event will be webcast at the company’s website at www.schiffnutrition.com. The webcast replay will be available for 90 days. If you do not have Internet access, the dial-in number will be 1-866-700-0161 for domestic callers and 1-617-213-8832 for international callers. The participant pass code is 86364520. A replay of the call will be available by dialing 1-888-286-8010 for domestic callers and 1-617-801-6888 for international callers, and entering pass code 35086433. The telephone replay will be available through April 9, 2012.

About Schiff Nutrition

Schiff Nutrition International, Inc. is a leading nutritional supplement company offering vitamins, nutritional supplements and nutrition bars in the United States and abroad. Schiff’s portfolio of well-known brands includes Schiff Move Free®, Schiff® Vitamins, Schiff MegaRed®, Schiff Mega-D3®, Tiger’s Milk®, Schiff Sustenex®, and Schiff Digestive Advantage®. Focused on quality for 75 years, Schiff’s headquarters and award-winning manufacturing and distribution facility are based in Salt Lake City, Utah. To learn more about Schiff, please visit the web site www.schiffnutrition.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that are based on management’s beliefs and assumptions, current expectations, estimates, and projections. These statements are subject to known and unknown risks and uncertainties, certain of which are beyond the company’s ability to control or predict, and therefore, actual results may differ materially. For example, statements concerning future benefits, opportunities and the financial impact of the acquisition of Airborne are forward-looking statements. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date hereof. Schiff disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise. You are cautioned not to place undue reliance on these forward-looking statements.

Important factors that may cause actual results of Schiff to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to: the inability to successfully integrate Airborne into Schiff’s operations or to achieve the anticipated synergies, benefits or other opportunities of the Airborne acquisition, the inability to perform obligations under, or to operate within the constraints of, the new debt facility, dependence on sales of Schiff Move Free product and the joint care category, dependence on sales of Schiff MegaRed product, dependence on individual customers, adverse publicity or consumer perception regarding our nutritional supplements and/or their ingredients, similar products distributed by other companies or the nutritional supplement industry generally, the impact of competitive products and pricing pressure (including expansion of private label products), the inability to successfully bid on new and existing private label business, the impact of raw material pricing, availability and quality (particularly relating to joint care products and ingredients from third-party suppliers outside the United States, including China), claims that our products infringe the intellectual property rights of others, the inability to enforce or protect our intellectual property rights and proprietary techniques against infringement, the inability to successfully launch and maintain sales (especially in the joint care and omega-3 categories) outside of the United States while maintaining the integrity of the products sold and complying with local regulations, the inability to appropriately respond to changing consumer preferences and demand for new products, the inability to gain or maintain market distribution for new products or product enhancements, including products in the probiotic space, litigation and government or administrative regulatory action in the United States and internationally, including FDA enforcement and product liability claims, the inability or increased cost to obtain sufficient levels of product liability and general insurance, the inability to comply with existing or new regulations, both in the United States and abroad, and adverse actions regarding product formulation, claims or advertising, product recalls or a significant amount of product returns, dependence on a single manufacturing facility and potential disruptions of our manufacturing operations, the inability to find strategic transaction opportunities or the inability to successfully consummate or integrate a strategic transaction (including the inability to successfully integrate the business recently acquired from Airborne), the inability to maintain or attract key personnel, interruptions to our information technology systems, control by our principal stockholders, and other factors indicated from time to time in the company’s SEC reports, copies of which are available upon request from the company’s investor relations department or may be obtained at the SEC’s web site (www.sec.gov). These risks and uncertainties should be carefully considered before making an investment decision with respect to shares of our common stock.