Minneapolis nutritional supplement maker Airborne Inc. said Monday it has been acquired by Schiff Nutrition International for $150 million.
Schiff, based in Salt Lake City, acquired all of Airborne's stock from GF Capital Private Equity Fund in an all-cash transaction.
As part of the deal, Airborne and its 32 workers will shut down Minneapolis operations, said Airborne CEO Marti Morfitt.
The sale puts a cap on a successful turnaround of the once-troubled Airborne, which was founded in 1997 by former California schoolteacher Victoria Knight-McDowell and her husband, Thomas John McDowell. The company claims its tablets, powders and chewables help the immune system.
In 2008, the company ran into trouble with the Federal Trade Commission after making marketing claims that the effervescent Airborne products -- a blend of herbal extracts, vitamins, electrolytes, amino acids and antioxidants -- could reduce the severity and duration of colds and help people fight germs in airplanes, schools, offices and other crowded places.
Airborne paid $23.3 million to settle a class-action lawsuit and $6.5 million in fines to the FTC to settle false advertising claims. The company, which was founded in Carmel, Calif., moved to Minneapolis in 2008.
The following year, New York City-based GF Capital Private Equity Fund bought the company, brought in Morfitt to take the helm, and gave Airborne a clean slate.
"The day before GF Capital bought us, we were buried in debt, we were struggling to make payroll, we were calling in favors for people to do work for us," Morfitt said. "The asset sale cleaned that out. I so appreciate that the banks chose to do that. I don't know that anyone could have achieved this turnaround saddled with financial burden that the company had."
Morfitt previously had engineered a turnaround of CNS Inc., of Eden Prairie, the maker of Breathe Right nasal strips that was bought by GlaxoSmithKline in 2006 for $566 million.
At Airborne, Morfitt and the management team, who were co-investors, launched new product lines, expanded distribution and ensured its marketing complied with federal laws.
Airborne products now are sold in most major grocery stores, pharmacies and airports in the United States and Canada. The company had revenue of about $70 million for a 12-month period ended in February, according to Schiff officials, including the successful launch of a chewable tablet.
Immune-support products, including Airborne, Emergen-C and vitamin C, are part of a $500 million industry that is growing about 5 to 6 percent a year. That's about double the broader industry of over-the-counter nutritional supplements.
That growth potential is what made the acquisition so attractive, Schiff CEO Tarang Amin said in a conference call with investors. About 70 percent of consumers know about Airborne, and the products have a "very loyal customer following," he said.
Schiff is a 70-year-old maker of vitamins, supplements and nutrition bars. It had sales last year of $243 million.
Airborne's products are expected to continue to be manufactured by Amerilab Technologies Inc., in Plymouth.
Jackie Crosby • 612-673-7335
