March 16, 2000
HealthCentral.com Swallows Vitamins.com
By Clint Boulton
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."