Baywood Swallows LifeTime Vitamins

SCOTTSDALE, Ariz.—Baywood International Inc. (OTCBB:BYWD) purchased substantially all the assets and liabilities of Nutritional Specialties, also known as LifeTime Vitamins, for a total transaction price of at least $11 million. The transaction price includes $7.6 million in cash, $1.1 million in common stock (22 million shares), $0.7 million 8-percent subordinate seller notes, $0.6 million in 8-percent convertible notes and assumption of about $1.0 million in liabilities.

The deal includes 370 LifeTime products sold directly to independent and chain health food stores, pharmacies and other direct-to-consumer channels. International sales operations of this brand include Canada, Turkey, Croatia, Dubai, Holland and Sweden. Overall revenues for fiscal 2006 (ended Aug. 31, 2006) were $11.9 million, with taxable income of $1.25 million. Unaudited calendar 2006 results show $12 million in revenues and $1.5 million in earnings.

Baywood (www.bywd.com) said it will operate LifeTime as a separate subsidiary, remaining at its location in Orange, Calif. Tom Pinkowski, LifeTime’s current vice president and one-third owner, will become president of the new subsidiary, continuing to execute the LifeTime business plan post-acquisition.

“This transaction was driven by our desire to partner with a complementary company that shares our vision to continue the momentum and strength of an established brand, such as LifeTime, in our rapidly growing industry,” stated Neil Reithinger, president and chief executive officer (CEO) of Baywood. “By coupling LifeTime’s existing strengths with a new dynamic sales and marketing focus, we hope to build a preeminent brand within the nutraceutical industry. The needed organizational flexibility and financial backing to execute this vision is what made Baywood a natural fit with LifeTime.”