SALT LAKE CITY - USANA Health (NYSE:USNA) Sciences, Inc. (NYSE: USNA), which InvestingPro data shows maintains a strong "GOOD" financial health rating with more cash than debt on its balance sheet, has acquired a 78.8% controlling interest in Hiya Health Products, LLC, a company specializing in children's health and wellness products, for $205 million in cash. The transaction, which closed today, is expected to be immediately accretive to USANA's 2025 adjusted EBITDA.
Hiya, a direct-to-consumer brand with a subscription model, reported last twelve months net sales of $103 million, net income of $19 million, and adjusted EBITDA of $22 million as of September 30, 2024. The acquisition is part of USANA's strategic initiative to diversify its growth and distribution channels, reaching a broader customer base in the United States and potentially enhancing its tax efficiency and profitability. USANA currently maintains impressive gross profit margins of nearly 81% and trades at an attractive EV/EBITDA multiple of 2.6x.
USANA's President and CEO, Jim Brown, emphasized the alignment between USANA's vision and Hiya's brand, which was founded by Darren Litt and Adam Gillman. Litt and Gillman will continue to lead Hiya, leveraging USANA's international expertise to expand their product reach.
The acquisition is seen as a significant step for USANA to strengthen its financial profile and establish a stronger presence in the children's wellness market. The company anticipates Hiya's net sales growth to be around 30% year-over-year for fiscal year 2025. For detailed analysis of USANA's growth potential and comprehensive valuation metrics, investors can access the full company research report on InvestingPro, which covers over 1,400 US stocks with expert insights and actionable intelligence.
USANA financed the transaction with cash on hand and its existing credit facility. BofA Securities and Wilson Sonsini Goodrich & Rosati, P.C. advised USANA, while William Hood & Company, LLC and Bodman PLC advised Hiya.
USANA will discuss the details of the transaction and its implications during a conference call scheduled for 5:00 PM Eastern Time today. This acquisition marks a continuation of USANA's commitment to providing high-quality nutritional products and expanding its reach in the wellness industry.
The information in this article is based on a press release statement. According to InvestingPro analysis, USANA's stock is currently trading near its 52-week low, with multiple ProTips suggesting potential value opportunities for investors. The platform offers 15 additional exclusive insights about USANA's financial position and market outlook.
In other recent news, Usana Health Sciences Inc. reported a challenging third quarter, with net sales falling below expectations due to a difficult operating environment, particularly in China. Despite a 7% increase in active customer counts, net sales in China decreased by 4%. In response to these recent developments, the company plans to increase promotional activities in the fourth quarter.
Usana also launched new products including Celavive Resurfacing Serum and Whey Protein Isolate in North America, reflecting a focus on product innovation. The company's strategy includes increasing the frequency of new, high-quality product launches and expanding its nutritional product line in 2025.
However, increased spending on incentives and promotional activities is anticipated to affect Q4 margins. Despite these challenges, management remains cautiously optimistic about the impact of Chinese government stimulus on consumer spending. The company's commitment to organic growth, with share repurchases as a secondary option, underscores its focus on long-term strategies.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.