Equity Firm Buys M.D. Labs 27909

Equity Firm Buys M.D. Labs

PHOENIXSeeking entry to the$19.8 billion nutritional supplements market, Pivotal Private Equity LLCpurchased health food product manufacturer M.D. Labs in December 2004 for anundisclosed amount. As a part of the transaction, the company has been renamedWellements.

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

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

Pivotal Private Equity is a wholly owned subsidiary of thePivotal Group, which is more accustomed to investing in real estate-basedprojects than in food/supplement ventures. Even for its part, the subsidiaryísrecent ventures included the acquisition of leading Internet services companyNetwork Solutions, which is best known for the more than 8 million domain namesit has under registration and management.

While broadly seeking to provide equity for middle-marketcorporations of no specified industry, Pivotal Private Equity has primarilyfinanced telecommunications, energy, manufacturing and leisure industries.

However, the double-digit growth of the nutritionalsupplements industry proved alluring.

By acquiring M.D. Labs and rebranding it as Wellements, wehave a solid platform for future growth in this exciting and fast-changingindustry, said Jahm Najafi, chief executive officer of Pivotal PrivateEquity. Over the coming year, weíll be working with Mr. Taheri and hismanagement team to broaden Wellements base of distribution and launch amarketing campaign to build customer loyalty.

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