Twinlab Gains MLMDistribution Via Buyout

RONKONKOMA, NY—Dietary supplement maker Twinlab Corp. gained a foothold in the lucrative network marketing business through its acquisition on Nov. 13 of Changes International, a multi-level supplement marketer based in Destin, FL. Terms of the acquisition were not disclosed, but sources indicate the purchase price was $12.5 million.

Through a sales force of approximately 60,000 independent distributors in the U.S., Canada, Australia and the U.K., Changes International generated sales of $30 million for the first nine months of 1997. Twinlab expects the acquisition to be immediately accretive to earnings.

Scott Paulson and Terry Paulson, co-founders of Changes International, following the merger will continue to serve as president and VP, respectively, of Changes International.

According to Ross Blechman, Twinlab’s chairman, president and CEO, the company plans to build upon Changes International’s existing line of eight products and develop formulas exclusively for the network marketing distribution channel, marketing them under the Changes International brand name.

“Multi-level marketing [MLM] is a growing part of the business in terms of distribution,” says Matt Patsky, senior analyst for Adams, Harkness & Hill in Boston. “Now Twinlab has diversified into a market that isn’t in its retail channel. The brands will remain pure to the channels. The synergies are in product development and manufacturing,” Patsky says.