Jamieson Wellness is counting on a growing trend for healthy lifestyles to help accelerate its expansion plans at home and abroad over the next five years, says the head of the nearly-century old vitamin and natural health products company. The company's President and CEO, Mark Hornick, is seen in an undated handout image.HO-Jamieson Wellness/The Canadian Press
Shares in vitamin and health-products producer Jamieson Wellness Inc. rose swiftly in its stock-market debut on the Toronto Stock Exchange with its U.S. private-equity backer among the big winners.
The Canadian-based firm raised $300-million – $245-million in a treasury offering and a secondary offering worth $55-million that saw a number of its major stakeholders reduce their stakes.
The shares closed at $17.30 apiece, up 10 per cent compared with the $15.75 initial public offering (IPO) price.
This has been a standout year for IPOs in Canada with 16 new offerings during the first half of the year – a five-year high, according to data from PricewaterhouseCoopers LLP.
Jamieson's IPO was co-led by BMO Nesbitt Burns Inc. and RBC Dominion Securities Inc., with underwriters earning a $15.8-million fee on a commission of 5.25 per cent.
Founded in 1922, Jamieson was acquired by New York-based CCMP Capital Advisors in 2014 for $300-million. Under private-equity ownership, the company broadened its focus beyond the main Jamieson brand, making a number of acquisitions, including buying women's wellness company Lorna Vanderhaeghe Health Solutions in 2014 and sports-nutrition supplements maker Body Plus earlier this year.
Jamieson also doubled its international sales by expanding into 10 new markets, with sales increasing at a roughly 9-per-cent clip during the period.
The turnaround of 3 1/2 years under private-equity ownership was quick compared with CCMP's normal holding period of five years but it could have been even quicker. The New York-based private-equity company had been approached on a number of occasions by Chinese buyers.
"We could have sold it to Chinese buyers. It just wasn't the right transaction for us," CCMP managing director Joe Scharfenberger said in an interview.
"This company belongs to the Canadians and it's a great Canadian brand and that's where we thought it would have the best home."
Mr. Scharfenberger says interest was particularly high among Canadian investors for the offering also because of the scarcity of publicly traded consumer stocks.
CCMP, which made a roughly three-fold return on its investment, is selling 2.4 million shares in the secondary offering, bringing its stake down to about 47 per cent. The buyout shop intends to sell its remaining stake over time.
Jamieson plans to use the proceeds from the treasury offering to pay down debt and cash out its preferred shareholders – an expense that has consistently weighed on profitability over the past few years.
In an interview, chief executive officer Mark Hornick says the firm is expected to turn a profit when it reports its first earnings statement as a publicly traded company in August, and he expects Jamieson to be consistently profitable after that.
"We expect to have significant, continued growth in Canada but the rate of growth outside Canada should outpace that," he said. In particular, he has high hopes for growth in China, which is one of the biggest consumers of vitamins in the world.
While much of its future growth is expected to come from international markets, the company has no plans to move its manufacturing plants overseas.
"In the vitamin world, we believe it's very important to have direct control over your quality," Mr. Hornick said.
Partly due to stringent regulations from Health Canada, the firm has a strong reputation for manufacturing quality both in Canada and internationally, he said.
Jamieson has three factories in Canada – two in Windsor and another in Toronto, and employs 785 people.