The company last week sold a controlling interest to
Sawaya Segalas advised the seller, company founder Victoria Knight-McDowell.
Last year, Knight-McDowell, a former second grade teacher, launched a campaign against previous investor
Summit’s equity investment in Airborne in 2005 was estimated to be about $70 million. About a year later, Summit tried to exit Airborne for an estimated $350 million to $400 million, but was unsuccessful.
Then, in early 2008, a class-action lawsuit for false advertising was settled. Airborne had claimed to ward off colds and the flu with no research backing the claims. The company denied it was in the wrong, but paid $23.3 million in damages.
After the lawsuit, Knight-McDowell purchased back the company for an undisclosed amount, which was likely less than what she sold it for, given the lawsuit controversy and other economic factors.
GF Capital and Stockton Road Capital hope to move past that, stressing that the company has returned to growth in the last year and remains one of the best-selling products in the “cough-cold category.”
The firms have brought in Martha “Marti” A. Morfitt to run the company. Morfitt is the former CEO of CNS Inc., a health products company that Sawaya Segalas previously advised in a separate sale. Under Morfitt’s leadership, Airborne is expected to invest in marketing and development of new products.
“The business has worked with the government to bring its marketing in line with regulations, and is in a nice growth trajectory now,” said Joe Rhodes, a former partner with Charterhouse Capital, who founded Stockton Road Capital six months ago.
At Charterhouse, Rhodes led the firm’s consumer products investments, including a deal for nutritional products company Amerifit Nutrition. Airborne Health is Stockton Road Capital’s first deal. —Erin Griffith