New initial public offerings (IPOs) came to a near standstill in 2008, as the public market environment grew increasingly inhospitable for companies throughout the course of the year. Now, the IPO market is starting to show signs of new life, although the 21 IPOs launched this year remain a far cry from the hundreds that occurred annually just a few years ago. In recent months, IPOs have been announced for two U.S. nutrition companies that are performing well in the current recession. In June, Vitacost.com, an online retailer of dietary supplements and other health and wellness products, revived its IPO plans by submitting an updated amendment to the original S-1 filing the company logged with the Securities and Exchange Commission (SEC) two years ago. Six months after pulling its previous IPO filing, the parent company of supplement retailer Vitamin Shoppe, VS Holdings, once again filed to go public in July.
Boca Raton, Florida-based Vitacost.com plans to raise as much as $143 million—up from the $57 million the company originally planned to raise—with its IPO. The company’s stock will be listed on the NASDAQ Global Market under the symbol “VITC.” Vitacost.com, which sells its own line of supplements under the Nutraceutical Sciences Institute (NSI) brand, reported that its sales for the 12 months ended March 2009 totaled $156.3 million. The company has more than doubled its revenue and grown its operating cash flow by a factor of 10 since its original public offering filing in 2007. During the first quarter of 2009, Vitacost.com’s overall gross margin increased to approximately 33%, the company reported. One key element of Vitacost.com’s growth strategy is to sell more NSI branded proprietary products, which have a significantly higher gross margin for the company. The company also plans to grow its distribution platform and manufacturing capabilities and expand internationally.
As Nutrition Business Journal reported in July, Vitamin Shoppe plans to raise as much as $143.8 million on the New York Stock Exchange with its IPO.
“Public offerings by companies with strong financials will get done in 2009,” David Thibodeau, managing director of Canaccord Adams, told NBJ Summit attendees in July.