Metabolife International Inc. filed Chapter 11 bankruptcy July 1, and IdeaSphere Inc. proposes to repeat the strategy that brought it Twinlab by acquiring Metabolife?s nonephedra business for $23.5 million.
The deal includes Metabolife?s production plant and development labs in Orem, Utah, and a distribution center in Memphis, Tenn. The San Diego weight loss supplement company will auction its assets in September, the company said in a statement.
Ephedra was the major ingredient in Metabolife 356, once the company?s best seller. It removed the stimulant in 2003, but lawsuits have dragged financial results down.
?We looked at buying Metabolife a year ago, but we couldn?t get comfortable with the ephedra issues,? said Mark Fox, president of IdeaSphere.
IdeaSphere pulled Twinlab brands out of mass-market distribution in 2004 to concentrate on the natural channel. Buying Metabolife gives IdeaSphere a new mass-market presence, Fox said.
Integrating Twinlab proved to be a more complicated project than originally thought, Fox said. ?Some distributors had 35-plus weeks of product. It took 18 months to work through the inventory in the pipeline.?
Natural Foods Merchandiser volume XXVI/number 8/p. 8