InterHealth, based in Benicia, CA ,continues to execute on its acquisition strategy mapped out when private equity partners Kainos Capital took over the company in late 2013.
“We decided to build a larger specialty branded ingredient business based on our original premise of going after ingredients that are research based, patent protected and branded,” Paul Dijkstra, CEO of InterHealth told NutraIngredients-USA. “We want to set ourselves apart by doing real science.”
Jewels in the crown
The brands Seditol and Nexrutine were also acquired in the move. But Relora and Sytrinol are the jewels in this particular crown, Dijkstra said. Relora is a a patented combination of extracts of the bark of Magnolia offcianalis and Phellodendron amurense and is based on their active ingredients, honokiol and berberine, respectively. Magnolia officianalis is commonly known as the Houpu Magnolia and is native to China; Phellodendron amurense, commonly known as the Amur Cork Tree, is native to northeastern Asia and Japan. The bark of both trees has a long history of use in traditional Chinese medicine.
In the West, they have been used mostly for treating stress. Relora has been sold in the US since 2000 and has been approved for sale in Canada. It has been used mostly in supplements in both tablet and capsule form and has been featured by some major manufacturers such as Now Foods, Source Naturals, HVL and Reliance Vitamins and Celestial Seasonings.
Sytrinol, which Next itself had acquired from KGK Synergize in 2013, is a patented and proprietary formula derived from natural citrus and palm fruit extracts. It combines polymethoxylated flavones (PMFs) and delta, gamma, and alpha tocotrienols. The ingredient has data showing it positive effects in improving measures of total cholesterol, LDL-cholesterol, and triglycerides.
Ingredient more important than category
Dijkstra said InterHealth’s strategy is to acquire proven ingredients and then build upon that base.
“We want to set ourselves apart by doing real science. We want to bring quality R&D to this industry. If we can absorb smaller companies that have the bones, that fit this model, we want to bring them on board. We want to add research to those ingredients either in safety or efficacy. Next was perfect fit for that model,” Dijkstra said.
As an example of extending the science behind an existing ingredient, Dijkstra offered up 7-Keto, a weight loss ingredient that InterHealth acquired from Humanetics in mid 2014.
“With 7-Keto, we are extending that with a study on a lower dosage aimed at increasing metabolic rates. If you were to add that to a diet plan at the lower dose you could continue on the plan with better results, and the lower does makes it more affordable,” he said.
The other acquisition made under the new private equity structure was to bring fully within house the supply chain for Interhealth’s joint health collage ingredient UC-II. So now InterHealth has strong positions in stress management, heart health, joint health and weight management. The strategy for the company is to focus more on the quality of the ingredients themselves, with their market positioning as a secondary consideration, Dijkstra said.
“I think that in every category when there are research-based ingredients that are real and that we can expand upon. I’m not focused on being in this or that category,” he said.
Long term plan
Dijkstra said he’s happy with the support his private equity partners have provided to execute the strategy he’s mapped out for the company. His experience flies in the face of the common conception of private equity ownership, that being that those type of investors buy companies with the primary purpose of repackaging them for a subsequent sale.
“You hear about private equity firms that just slash and move on but we have been executing a building strategy which has been very exciting. And we’re not done yet,” he said.