Global Nutritional Products Leader Expands
Competitive Position in High-Growth U.S. Nutrition Market
Combined Companies Offer Broad Science-Based Product Lines;
Strong Presence in Specialty Retailing, Mass Market and
Multilevel Marketing Channels
ZOETERMEER, Netherlands and BOCA RATON, Fla., May 1 /PRNewswire/ --
Royal Numico N.V. (Amsterdam Stock Exchange: NUM.), a leading global
manufacturer and marketer of specialized nutrition products, today announced a
definitive merger agreement to acquire Rexall Sundown, Inc. (Nasdaq: RXSD), a
major U.S. manufacturer and marketer of nutritional supplements and consumer
health products. Royal Numico said the acquisition would enhance its presence
in the U.S. dietary supplements market and further strengthen its position as
the global leader in specialized nutrition products.
Under the terms of the agreement, Royal Numico will make a US$24.00 per
share cash tender offer for all of Rexall Sundown's approximately 64 million
outstanding shares, valuing the transaction at approximately US$1.8 billion,
including the assumption of approximately US$114 million of Rexall Sundown's
net debt plus the value of Rexall Sundown's outstanding stock options.
The combined company expects to have annual pro forma revenues for
calendar year 2000 in excess of US$4.5 billion and more than 28,500 employees
worldwide. Royal Numico expects the acquisition, which is anticipated to be
completed during the second quarter of 2000, to be immediately accretive to
earnings per share.
J.C.T. van der Wielen, President and CEO of Royal Numico, said, "This
merger significantly expands our presence in the U.S. dietary supplements
market and strengthens our leadership position as a global nutrition company.
Through Rexall Sundown's well-known consumer brands and distribution strength
in the U.S. food, drug and mass market channels, we gain critical marketing
expertise and immediate access to the rapidly growing U.S. consumer market for
nutritional supplements. In turn, Royal Numico's leadership in nutrition
research and product development will allow Rexall Sundown to expand its
offerings of branded science-based products, further enhancing its strong
position in the U.S. consumer nutrition market."
Mr. van der Wielen continued, "Rexall Sundown is a perfect complement to
our previous acquisition of General Nutrition Companies, Inc. (GNC), the
leading U.S. nutrition specialty retailer, as these businesses focus on
separate, non-overlapping segments of the U.S. consumer market. The addition
of Rexall Sundown gives us a strong position in all channels of this market
and a platform on which to build for future growth both in the U.S. and around
the world. Also, Rexall Showcase International, a multilevel marketing
business, enhances our position in the direct sales channel of the industry."
Damon DeSantis, President and CEO of Rexall Sundown, said, "We are very
pleased to be joining Royal Numico and are excited about the possibilities for
growth this new relationship brings Rexall Sundown. As a leader in the global
human nutrition industry, Royal Numico is highly respected for its focus on
research and its proven ability to develop and market global brands. Strong
science has become increasingly important in our product development, and
becoming part of Royal Numico will give us access to this expertise. We look
forward to leveraging this science through our multiple brands and
distribution channels."
The key management of Rexall Sundown, including Damon DeSantis, has
entered into agreements to remain with Rexall Sundown following the merger.
Royal Numico will commence the cash tender offer within seven business
days. The offer will remain open for 20 business days, unless extended
pursuant to the merger agreement. The offer is conditioned, among other
things, upon a majority of the issued and outstanding shares of Rexall
Sundown, on a fully diluted basis, being validly tendered and not withdrawn
prior to the expiration of the offer, other customary conditions and customary
regulatory approvals. Following successful completion of the tender offer,
Royal Numico's acquisition subsidiary will be merged into Rexall Sundown and
any shares not purchased in the tender offer will be converted into the right
to receive the same US$24.00 per share in cash. The merger agreement may be
terminated by Rexall Sundown upon certain conditions, including acceptance of
an acquisition proposal which is superior to the Royal Numico offer, and
payment to Royal Numico of a customary termination fee.
The Board of Directors of Rexall Sundown has unanimously approved the
tender offer and the merger and has recommended that Rexall Sundown
shareholders tender their shares in the offer. In addition, certain executive
officers and shareholders of Rexall Sundown, who in the aggregate hold more
than 50% of Rexall Sundown's issued and outstanding shares, have entered into
a shareholder agreement pursuant to which they have agreed to tender all of
their shares into the Royal Numico tender offer and have granted Royal Numico
an option and proxy on such shares. Certain aspects of such shareholder
agreement will expire upon the termination of the merger agreement.
The tender offer is not subject to a financing contingency. Royal Numico
intends to fund the tender offer through a short-term bridge facility.
Schroder Salomon Smith Barney acted as financial advisor, and Vedder Price
Kaufman & Kammholz and Richards Layton & Finger acted as legal counsel to
Royal Numico. Morgan Stanley Dean Witter acted as financial advisor, and
Greenberg Traurig acted as legal counsel to Rexall Sundown.
Royal Numico N.V. (http://www.numico.com), headquartered in Zoetermeer,
the Netherlands, is a world leader in specialized nutrition. A holding
company for a group of companies including GNC, Nutricia, Milupa and Cow &
Gate, its products include infant nutrition, medical nutrition and nutritional
supplements. Numico concentrates on the development, manufacture and sales of
specialized nutrition products based upon medical scientific concepts with a
high added value. The company operates in some 100 countries.
Rexall Sundown (http://www.rexallsundown.com), headquartered in Boca Raton,
Florida, is a leading manufacturer and marketer of vitamins, nutritional
supplements and consumer health products primarily for the U.S. mass market.
This press release contains "forward-looking" statements as such term is
defined in the Private Securities Litigation Reform Act of 1995 or by the
Securities and Exchange Commission in its rules, regulations and releases,
which represents Rexall Sundown's interpretation or beliefs. These
forward-looking statements, by their nature, involve substantial risks and
uncertainties, certain of which may be beyond Rexall Sundown's control and
actual results may differ materially depending on a variety of important
factors including uncertainties related to acquisitions, government
regulation, managing and maintaining growth, the effect of adverse publicity,
litigation, reliance on independent distributors of Rexall Showcase
International, competition and other factors described in Rexall Sundown's
filings with the Securities and Exchange Commission.
The tender offer described in this announcement for the outstanding shares
of Rexall Sundown has not yet commenced, and this announcement is neither an
offer to purchase nor a solicitation of an offer to sell securities. The
tender offer will be made only through the Offer to Purchase and the related
Letter of Transmittal. Shareholders of Rexall Sundown are strongly advised to
read both the tender offer statement and the solicitation/recommendation
statement regarding the tender offer and the merger, when they become
available, because they will contain important information. The tender offer
statement will be filed by Royal Numico with the Securities and Exchange
Commission (SEC), and the solicitation/recommendation statement will be filed
by Rexall Sundown with the SEC when the tender offer commences. Shareholders
may obtain a free copy of these statements and other documents filed by Royal
Numico and Rexall Sundown at the SEC's web site at http://www.sec.gov . These
statements also may be obtained for free from the Information Agent, Innisfree
M&A Incorporated (Rexall Sundown shareholders please call 1-888-750-5834).
An investor presentation on the transaction will be posted on the website:
http://www.numico.com as of May 1, 2000, 4:00 a.m. Eastern Daylight time
(see "Investor Relations - Analyst presentation").
It will also be possible to listen to an investor presentation that will be
held on May 1, 2000, at 9:00 a.m. Eastern Daylight time.
Dial-in number (to the Netherlands): 011-31-20-4711567
A replay of this presentation will be available for one week --
Dial-in number (to the Netherlands): 011-31-70-3041070
Code: 21216
Recording Code: 20000501250
SOURCE Rexall Sundown, Inc.
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Related links:
http://www.numico.com
http://www.rexallsundown.com
CONTACT:
Klaas A. de Jong, Director Corporate Affairs,
+31-79-353-9221, or Jacqueline van der Klift, Investor Relations
Manager, +31-79-353-9003, both of Royal Numico N.V.; or Edward
Nebb of BSMG Worldwide, 212-445-8213, for Royal Numico N.V.; or
Carol Walters, 561-999-1960, or Donna Conners, Investor
Relations, 561-241-9400, both of Rexall Sundown; or Karen
Griffiths of FRB- BSMG, 212-661-8030, for Rexall Sundown
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