Blyth Pulls ViSalus’ IPO Plans
by Jose Seminario | on
–Blyth withdraws IPO for its nutritional supplement unit, ViSalus
–Company cites uncertain market conditions for the withdrawal
–Blyth’s CEO is “extremely confident” in ViSalus‘s long-term growth prospects.
(Adds stock performance, Moody’s outlook, CEO comments from release, recent IPO trends)
Blyth Inc.’snutritional supplement unit, ViSalus Inc., withdrew its plans for an initial public offering, citing uncertain market conditions, a move that comes amid tepid demand for a number of IPOs of late.
ViSalus, which focuses on weight management, energy drinks and nutritional supplements, registered for an estimated IPO of up to $175 million last month.
Blyth’s shares recently dropped 19% to $26.30 as the company said current market conditions aren’t conducive to recognizing the level of sales seen during the first half of 2012. Shares had popped 17% the day of the IPO plans were unveiled last month.
Blyth was expected to retain a stake of more than 50% in ViSalus following the offering.
“We are extremely confident in the long-term growth prospects of ViSalus,” Blyth Chairman and Chief Executive Robert B. Goergen said Wednesday.
ViSalus, formerly known as FVA Ventures Inc., relies on a direct-to-consumer sales model that uses independent contractors paid on commission. These independent contractors build a network of other salespeople they recruit, much in the way Amway sells its products.
In the first six months of the year, net sales at ViSalus surged to $327.3 million from $60.6 million as both customers and individual promoters increased. The company reported a profit of $24.5 million, compared with $1.8 million a year earlier. ViSalus made up 54% of sales at Blyth in the first half, and the company has credited its sharp sales increases primarily to growth in ViSalus.
Meanwhile, Moody’s Investors Service lowered its credit ratings on Blyth to negative from stable last week, citing continued weakness in its core direct selling candle and home-fragrance business, as well as uncertainty stemming from the IPO of ViSalus. The ratings firm also said the outlook reflects Blyth’s growing reliance upon ViSalus and “the heightened risk profile associated with its business model and the weight-management product category generally in comparison to candles and fragrance products.”
The ViSalus withdrawal is the latest signal of sluggish IPO demand. Of five new issues to begin trading last Thursday, only one, real-estate listing company Trulia Inc. (TRLA), delivered a post-IPO punch. Two other offers slated to list Friday hit snags with Smith Electric Vehicles Corp. shelving its plans to go public after it couldn’t secure an attractive deal and the other offering moving to this week….More at Blyth’s ViSalus unit pulls plans for IPO – MarketWatch
Blyth’s ViSalus Unit Withdraws IPO Plans on Uncertain Market Conditions
Wall Street Journal
“Nothing in Blyth’s or ViSalus‘ fundamentals has changed,” said Blyth Chairman and Chief Executive Robert B. Goergen on a conference call Wednesday, adding that Blyth has a strong balance sheet and continues to generate strong cash flow, while ViSalus …
Blyth’s ViSalus unit pulls plans for IPOMarketWatch
ViSalus scraps plan for IPO, Blyth shares tumbleHuffington Post
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