Nutritional products retailer GNC Acquisition Holdings Inc. said Thursday it has priced its initial public offering of 22.5 million shares of Class A common stock at $16.00 per share, which is at the mid-point of the company's expected range of $15.00 to $17.00 per share.
The Pittsburgh, Pennsylvania-based company, to be renamed GNC Holdings, is offering 16 million shares of the shares being issued, while 6.5 million shares are being sold by selling stockholders. In addition, selling stockholders have granted the underwriters a 30-day option to purchase up to an additional 3.375 million shares. The offering is expected to close on April 6, 2011.
The company's common stock is expected to begin trading Friday, April 1, on the New York Stock Exchange under the ticker symbol "GNC".
GNC expects to use net proceeds from the offering of about $240 million and cash on hand to redeem about $223 million aggregate liquidation preference of the company's Series A preferred stock and to make a contribution to the company's subsidiary, General Nutrition Centers, Inc.
The net proceeds will also be used for repaying about $300 million of outstanding debt under General Nutrition Centers' senior credit facility, and to pay about $11 million to satisfy obligations under the company's management services agreement and Class B common stock.
GNC, which has a network of more than 7,100 locations and a website, GNC.com, is a specialty retailer of health and wellness products, including vitamins, minerals and herbal supplements products.
Goldman, Sachs & Co. and J.P. Morgan Securities LLC, along with Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc., are acting as joint bookrunners for the offering. Barclays Capital Inc., Credit Suisse Securities (USA) LLC, William Blair & Company, L.L.C. and BMO Capital Markets Corp. are acting as co-managers.
This is the third attempt by GNC to tap the public equity markets, after earlier attempts by its previous owner and private equity firm Apollo Global Management (APO) to take it public in 2003 and 2006. GNC was acquired in 2003 by Apollo Global Management for $750 million.
Apollo subsequently sold the company in 2007 to private investment groups Ares Management and the Ontario Teachers Pension Plan Board for a total enterprise value of $1.65 billion. It may be noted that Apollo listed on the New York stock exchange earlier this week.
For the six months ended June 30, 2010, GNC's net income rose to $51.1 million from $37.4 million in the prior-year period. Revenues for the half-year period were $920.7 million, up from $872.3 million in the same period in 2009.
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