Summit Partners, a Boston-based private-equity firm that took a controlling stake in Airborne last year, has been quietly shopping the business in recent weeks, according to people familiar with the matter, though the company doesn't appear to have retained an investment bank or begun an auction yet.
Airborne, ranked No. 1 in the Inc. 500 listing of the fastest-growing privately held companies this year, seemingly would present a rich target for a variety of drug and package-goods marketers. Its rapid growth and projected $300 million in sales for the fiscal year that ends March 31 could justify a price of $1 billion or more, were it to command a sales multiple similar to what Chattem recently paid Johnson & Johnson for a stable of older, slower-growing remedies or what Physicians Formula cosmetics, another Summit investment, cleared in an initial public offering last week.
Clinical research findings
But people who had considered Summit's informal proposition expressed skepticism. One predicted any buyer could get stuck with rapidly declining sales should an established competitor produce clinical research finding the brand's effervescent herbal supplements ineffective in preventing colds.
Airborne is not an over-the-counter medicine: Like other herbal or nutritional supplements, its packages disavow any claims to treat or prevent disease, even though its buzz suggests otherwise. Airborne packages note the brand was "created by a schoolteacher!" That back story may not carry much scientific weight, but it's been a PR gold mine.
California elementary-school teacher Victoria Knight-McDowell and her husband developed the original mix of 17 ingredients in 1997 to help her keep germs from her students at bay. Ms. Knight-McDowell's appearances and glowing reviews on TV shows such as "Dr. Phil" and "Live with Regis and Kelly" and endorsements by celebrities such as Kevin Costner have fueled the brand's rise.
Will double ad spending
After Summit invested in the brand in March 2005, Ms. Knight-McDowell yielded the CEO post to Elise Donahue, a former executive of P&G and orphan-brand marketer Prestige Brands. Flush with cash from Summit, Airborne began its first media advertising last year and plans to double spending to $30 million in the next year. It also has expanded the brand with a nighttime version, an On-the-Go single-use powder and a sleep aid.
A recent study for the company found 80% of first-time users planned to buy Airborne again in the next 12 months.
A spokeswoman for Summit Partners didn't return calls for comment. A spokesman for TenUnited, Columbus, Ohio, which handles advertising and public relations for Airborne, referred questions to Summit, though he said he was unaware of any discussions regarding sale of the company.
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Mya Frazier contributed to this report.