Vitamin Shoppe pumps up its IPO

Posted Oct 28th 2009 2:30PM by Tom Taulli
Filed under: Private Equity

It's been a long wait for the Vitamin Shoppe, which filed for its IPO back in May 2007. Well, today the company finally hit the markets.

The Vitamin Shoppe issued 9.1 million shares at $17 each (the range was $14-$16). With the money, the company will pay down a portion of its outstanding debt.

Started in 1977, Vitamin Shoppe has grown into a large chain of vitamin/supplement stores, with 434 across 37 states. Even with the recession, the company has still been able to churn out same-store sales growth of more than 4%. For the first half of this year, revenues were $343.7 million, up from $307.1 million a year ago. Net income was $8.8 million.

Actually, the Vitamin Shoppe has had active involvement from private equity sponsors since 2002 (the former fund of Bear Stearns). The result has been a focus on cost-cutting and efficiencies.

Despite all this, there are certainly weaknesses. For example, the Vitamin Shoppe's online platform is fairly week.

Yet, investors are still excited about the offering. In today's trading, the shares of the Vitamin Shoppe are up 13% to $19.37.

Tom Taulli is the author of various books, including The Complete M&A Handbook.

Tags: inthenews, IPO, Vitamin Shoppe, VitaminShoppe, VSI