Equity Firm Buys M.D. Labs

PHOENIX--Seeking entry to the $19.8 billion nutritional supplements market, Pivotal Private Equity LLC purchased health food product manufacturer M.D. Labs for an undisclosed amount. As a part of the transaction, the company has been renamed Wellements.

The companies, both based here, cited timing and industry growth as key factors driving the deal. While we have been very successful with our products, the company is ready to move to the next level in terms of research and development, product diversification, marketing and distribution, said Keyvan Taheri, president of Wellements. The resources of Pivotal Private Equity will allow us to continue to grow as a company and capture a larger part of the market.

Wellements produces more than 60 products sold by major chain retailers such as Costco, GNC, Vitamin Shoppe and Hi-Health, as well as through independent natural products stores and through its own Web site, www.wellements.com.

Pivotal Private Equity is a wholly-owned subsidiary of the Pivotal Group, which is more accustomed to investing in real estate-based projects than in food/supplement ventures. Even for its part, the subsidiarys recent ventures included the acquisition of leading Internet services company Network Solutions, which is best known for the more than 8 million domain names it has under registration and management. While broadly seeking to provide equity for middle-market corporations of no specified industry, Pivotal Private Equity has primarily financed telecommunications, energy, manufacturing and leisure industries. However, the double-digit growth of the nutritional supplements industry proved alluring.

By acquiring M.D. Labs and rebranding it as Wellements, we have a solid platform for future growth in this exciting and fast-changing industry, said Jahm Najafi, chief executive officer of Pivotal Private Equity. Over the coming year, well be working with Mr. Taheri and his management team to broaden Wellements base of distribution and launch a marketing campaign to build customer loyalty.

Najafi also reported gross sales for Wellements are expected to exceed $50 million in 2005.