The US vitamins and supplements manufacturer has been criticised by the FDA due to its manufacturing and testing practices
Close up of woman looking at a supplement in her hand

Virtù Equity Partners, a private equity firm headquartered in Miami, has acquired vitamin and supplements manufacturer Nutracap Labs in a joint venture with DBD DTA Corporation. The business will operate as Nutracap Holdings and will be responsible for the innovation and development of vitamins, dietary and sports supplements, and other nutraceutical solutions for new emerging brands. After integration, Nutracap Holdings will play a key role in Virtù’s Beauty & Wellness investment platform.

DBD DTA Corporation (short for ‘Don’t Be Deceived, Don’t Turn Aside’) was founded by Virtù Equity in 2018 with the strategy of creating a global e-commerce-first consumer products company investing in and nurturing emerging brands in beauty and wellness. The company’s focus is to launch and develop purpose-driven brands in the hair, skin, and wellness segments.

US-based Nutracap Labs was founded in Atlanta, Georgia, and launched in 2017 as a contract manufacturer of vitamins, dietary and sports supplements, and nutraceutical products. The business is also in the market with proprietary brands, including Black Magic, GenOne, Chemix, and Raw Nutrition.

Nutracap Labs made headlines this year due to a warning letter sent by the FDA to its owner, John Wesley Houser, in May, following inspection of Nutracap Labs’ manufacturing facility.

The FDA cited the use of banned ingredient DMHA, and cited serious deficiencies in documentation procedures, from finished products not matching batch production records, shortcomings in the company’s use of master manufacturing records, to failure to perform adequate testing of incoming ingredients.

Nutracap Labs has developed thousands of new products for a long list of emerging and established brands. The company has grown at an average rate of 40% year-on-year, surpassing $30 million in sales.

Strategic acquisition

Virtù said this acquisition raises its assets under management above $50 million and is limited to a few external strategic investors.

Alvaro Lopes da Silva Neto

Following the addition of Alvaro Lopes da Silva Neto to the team in February, Virtù Equity established alliances with institutional investors and with industry strategic LPs. Among its new investors, Virtù Equity has one of the largest multi-family offices in Latin America as a key ally. “As I said before, having your feet on the ground is the best form of expertise to apply to an investment, and our new investors will be key allies for executing this strategy,” said Lopes.

Virtù noted that DBD DTA Corporation’s core markets are the US, China, and Australia, but the company already sells its products to more than 150 countries. Kerotin, a hair treatment brand catering to women undergoing life transitions or navigating change, was the first acquisition of DBD DTA Corporation.

“Sustainable speed is the name of the game,” said Vinicius Zacche Vazquez, a Virtù Equity partner involved in the deal. According to Vazquez, the Beauty & Wellness industry favours emerging brands over incumbents, mostly because of innovation and agility to adapt. “With Nutracap Holdings, we will be even better positioned to execute our strategy of combining organic and inorganic growth,” Vazquez concluded.

Date published: 24 November 2020

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