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GNC Shares Get Healthy Boost From New Majority Stakeholder

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GNC Shares Get Healthy Boost From New Majority Stakeholder
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Shares of GNC Holdings Inc. (NYSE: GNC) spiked Tuesday following an announcement that Harbin Pharmaceutical Group made a $300 million investment in the vitamin company as part of a joint venture agreement to facilitate GNC’s Chinese expansion efforts. 

Under the agreement, Harbin Pharmaceuticals, also known as Hayao, will invest $300 million in GNC in the form of newly issued convertible preferred shares. Hayao will in turn become the largest holder of GNC, owning 40 percent of the company on a converted basis when the deal closes in the second half of 2018, according to GNC. 

The Joint Venture

China, where GNC is expanding its business, is the largest international market for nutritional supplements. 

Hayao will give GNC access to crucial pharmaceutical distribution networks and will help facilitate the manufacturing, marketing, and sale of GNC products, according to the Tuesday announcement.

GNC CEO Ken Martindale said the move will position GNC to better generate growth and improve financial performance.

"As a recognized leader in China, Hayao is an ideal partner as we look to leverage the strength of the GNC brand and capitalize on the demand for nutritional supplements in China.”

Price Action

Shares of GNC were up 19.31 percent to $5 near the end of Tuesday's trading session. 

Related Links:

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Photo from Wikimedia. 

Posted-In: Harbin Pharmaceuticals Hayao Ken MartindaleNews M&A Top Stories Movers Trading Ideas Best of Benzinga

 

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