Tuesday 24 April 2018

Carlyle link to Holland & Barrett was probed by watchdog in Sam McCauley deal


Health products chain Holland & Barrett has a number of stores in Ireland, North and South
Health products chain Holland & Barrett has a number of stores in Ireland, North and South
Samantha McCaughren

Samantha McCaughren

The competition authority examined the links between private equity giant Carlyle and health chain Holland & Barrett in its examination of the takeover of the Irish group Sam McCauley Chemists.

A private-equity fund established by The Carlyle Group and Cardinal Capital Group, Carlyle Cardinal Ireland (CCI), completed the deal in May. The deal to acquire 30 Sam McCauley chemists was cleared earlier this month.

According to documents published by the Competition and Consumer Protection Commission (CCPC), a company called NBTY, part of Carlyle's portfolio, is a manufacturer, distributor and retailer of high-quality vitamins, nutritional supplements and related products in the United States. It sells its products through three operating divisions, including Holland & Barrett International, which has a number of stores in Ireland.

"NBTY is active in the State through its subsidiary, Holland & Barrett Limited (HBL), in the retail sale of healthy lifestyle and nutritional products," said CCPC. "HBL currently owns and operates 53 retail outlets in the State."

The watchdog said there was a horizontal overlap between the parties' activities, since both Sam McCauleys and Holland & Barrett are active in the retail supply of sports nutrition products and vitamins, herbal, mineral and supplement products.

In notifying the commission, the parties noted that both were involved in the health, well-being and beauty category.

Vitamins and sports nutrition were further identified by the parties.

And overlap in relation to the sales of specialist food and drink products and fruits, nuts, seeds and snack bars were also highlighted in the submission made by the parties.

The CCPC examined all these activities and found there was a variety of competitors also in the market and that the combined share of the companies would be relatively small.

The parties said there were 19 geographical areas where the businesses overlapped. However, the CCPC also found that there were several competitors in those areas, which would act as a "competitive constraint".

The commission concluded that the deal "will not substantially lessen competition" in the areas flagged.

CCI's other investments include Abtran, a business-process outsourcing company and chocolate maker Lily O'Brien's.

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