MusclePharm, Capstone sign strategic supply deals

MusclePharm, Capstone sign strategic supply deals

Agreements provide MusclePharm long-term access to Capstone’s development and manufacturing services, expand the production capacity at Capstone and grant MusclePharm certain warrants and options.

Capstone Nutrition, a leading turnkey developer and manufacturer of high-quality nutrition and OTC products, and MusclePharm Corp. (OTCQB: MSLP), a scientifically driven, performance-lifestyle sports nutrition company, announced the signing of a set of multiyear strategic supply agreements between the two companies. The agreements provide MusclePharm long term access to Capstone’s extensive high quality development and manufacturing services, expand the production capacity at Capstone to meet additional requirements, and provide MusclePharm with certain warrants and options.

“MusclePharm has long been one of our fastest growing customers, and we are thrilled to expand our relationship to help fuel their future growth and innovation,” said Greg Horn, CEO of Capstone. “Their vote of confidence in Capstone as their long term primary supplier is a validation of our commitment to quality, and of our strategy to work closely as partners with our customers.”

“MusclePharm and Capstone have had a long term relationship since MusclePharm’s founding,” said Brad Pyatt, CEO and founder of MusclePharm. “With more than two decades of experience manufacturing high-quality products, Capstone is the ideal partner for MusclePharm.”

Richard Estalella, president of MusclePharm added, “These agreements bring MusclePharm advantages in quality and innovation and dual supply in both the eastern and western U.S. while providing us with many of the advantages of vertical integration.” The initial term of the agreement is seven years, and MusclePharm has committed to produce a minimum of $90 million of its powder and capsule business with Capstone each year after a scale-up period during 2015.

The agreements enhance a capacity expansion program at Capstone’s state-of-the-art manufacturing facilities in Ogden, Utah, and in Spring Hill, Tenn., that was already underway. As part of the agreements, MusclePharm will pay $2.5 million in capital for specific capacity expansion at both facilities. This additional capacity will ensure that Capstone can continue growing with all of its customers while delivering the additional business volume for MusclePharm. “We expect that the expanded capacity, capabilities and buying power represented by the additional MusclePharm business will have advantages across our entire customer base.” said Peter Miller, Capstone’s chief innovation officer.

 

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