MotherNature.com Calls it Quits

CONCORD, Mass.—Less than a year after its IPO made the company millions, MotherNature.com (MTHR), based here, on Nov. 7 announced that its board of directors had unanimously voted to dissolve and liquidate the company due to a lack of financing prospects.

According to a company press release, the supplements e-tailer was unable to identify an acceptable buyer or strategic-alliance partner despite a “significant effort” to find one.

The announcement came just three weeks after Internet holding company SiteStar Corp. (SYTE) withdrew its $17.4 million buyout offer due to what it says was MotherNature’s refusal to enter into acquisition discussions. Similarly, Boynton Beach, Fla.-based Vitacost.com President Allen Josephs expressed disappointment in MotherNature’s decision to close before formally considering Vitacost’s one-for-one stock-merger offer, which it submitted in September.

At a special meeting held Nov. 30, shareholders approved the plan to liquidate and dissolve the company. According to a company statement, MTHR is proceeding with the sale of its assets and will make an initial distribution of the proceedings to shareholders.

In early November, MTHR said it anticipates the initial distribution of liquidated proceeds to be about $13.4 million or $.85/common share, which it would make available by the end of the year. Shareholders could also receive additional liquidation proceeds of $.15/share over the next three years, the company says.

There is no word yet on when MotherNature.com plans to close its website, and calls to Michael Barach, MTHR president and CEO, were not returned.

In September, United Natural Foods (UNFI) announced the launch of UNF Online, a customized Web hosting service the company developed in conjunction with MotherNature.com. According to UNFI VP Dan Atwood, MotherNature’s closing will not affect United’s bottom line.

“Given the fact that this program was barely in its infancy, participating retailers were not charged for any services and will be largely unaffected by this decision,” Atwood says. “This event has not, and will not, have any material impact on our business.”

Although United plans to discontinue UNF Online, Atwood says the company will “actively explore financially beneficial Internet-related opportunities for UNFI, which will enable us to better serve our customers and shareholders.”

Atwood says United also plans to provide order-fulfillment services; beta test Web-based retail and supplier services and systems through its retail division, Natural Retail Group; and focus on creating an Internet strategy without the capital risk frequently associated with Internet endeavors.

On Dec. 10, 1999, MotherNature’s IPO raised $53.3 million on the sale of 1.4 million shares sold at $13/share. The company hit its 52-week high of $14.56/share the same day.