Recently, L Catterton, a subsidiary of LV, announced that it will strategically acquire all the issued common stocks of Thorne Health tech, a health technology company, at a price of $10.20 per share and privatize it.
After the acquisition is completed, Thorne Health tech will be delisted from NASDAQ.
Thorne is an American company that provides personalized health testing and management services to consumers, as well as targeted healthcare products. It is worth mentioning that Thorne’s AI-driven technology platform,
Onegevity, provides actionable insights and personalized data, products, and services to help individuals actively manage and maintain their health.
The company went public on NASDAQ in 2021 and has been invested in by the Japanese consortium Kirin Holdings Co., Ltd. and Mitsui & Co., Ltd. Before delisting, Thorne Health tech had a total share capital of 53.92 million
shares. Roughly calculated, L Catterton’s acquisition amount is $550 million, approximately 4 billion yuan.
Who is Thorne Health tech?
Thorne Health tech was founded in 1984 and is a health technology company that specializes in developing customized health products and services for consumers using its Onegevity AI technology platform. Specifically, the company provides health testing to generate comprehensive, personalized molecular portraits for customers. Then, relying on the Onegevity technology platform, it analyzes and generates health management plans and health products.
The Onegevity technology platform is a multi-omics database that learns and understands the dynamic biological features of billions of human bodies to accurately describe users’ health status. This technology platform not only serves B2C consumers but also collaborates with B2B clients such as pharmacies, health professionals, and lifestyle companies to provide health testing and advice to B2B clients’ patients through third-party applications while saving data on clients’ own portals.
In addition, Thorne Health tech’s clients include biopharmaceutical companies that can use the Onegevity Discovery platform to assist in drug development.
So far, Thorne has over 5 million B2C customers, more than 46,000 healthcare professionals, thousands of professional athletes, and over 100 B2B clients of professional sports teams. In March of this year, the company was also selected for the Fast Company’s 2023 Global Most Innovative Companies list.
Thomas Wilson, the executive in charge of investor relations, said in an interview on March 31 of this year that Thorne’s growth rate in 2022 is 10 to 15 times the industry average. The company plans to achieve net sales of $280 million to $290 million in 2023, an increase of 22% to 27% compared to 2022. By the end of 2023, the company will also complete the construction of a new factory for health products and is expected to become one of the top five health product manufacturers in the United States.
Although Thorne’s growth is impressive, its performance in the stock market is lackluster. On September 24, 2021, Thorne Healthtech went public on the NASDAQ in the United States. The planned offering price was between $13 and $15, but the actual offering price was $10, raising a total of $70 million. However, on the first day of trading, the stock price fell below the offering price, closing at $7.55, a 24.5% drop.
For the next year, the stock price continued to decline, falling to $3.41 in November 2022. The stock price was only around $4.72 in April of this year and only gradually began to recover in July. So this time, L Catterton offered a price of $10.2 per share, surpassing Thorne’s highest price after going public.
It is worth mentioning that when the company went public, it received investments from two Japanese financial groups: Kirin Holdings Co., Ltd. and Mitsui & Co., Ltd. Kirin Holdings is a major company engaged in food and beverage businesses in Japan, as well as selling health products and drugs. Mitsui & Co., Ltd. is one of Japan’s largest general trading companies. Prior to this, Thorne also mentioned in its public information that it had established a joint venture with Mitsui & Co., Ltd. in Asia and established the first retail outlet in Asia in Singapore.
On October 17 of this year, Thorne HealthTech disclosed an internal transaction by a company insider. Kirin Holdings Co., Ltd., a shareholder holding more than 10% of the shares, sold 15.6742 million shares at a price of $10.2 on October 12, 2023, with L Catterton as the counterparty.
Lu Weikai Teng, invested in China.
Presumably, L Catterton believes that Thorne is a hidden gem whose stock performance does not reflect its actual value, which is why they are willing to acquire the company at a high price. “As investors focused on the consumer sector, we closely follow the industry trends in the field of health and wellness and understand the increasing importance of healthy lifestyles for consumers,” said Marc Magliacano, Co-Managing Partner of L Catterton’s flagship fund. “By integrating global resources and strategic planning, we can further realize Thorne’s vision: to provide clinically validated nutritional solutions to global customers through professional health testing and personalized healthcare products.”
L Catterton’s history can be traced back to 1989 when Carl Frechette and his accountant Frank Vest, along with Chinese-American investor J. Michael Chu and former US Treasury Secretary William Simon, jointly created Catterton-Simon Partners. In the following 27 years, Catterton invested in many well-known cases in North and Latin America. However, the real turning point did not come until 2016 when Catterton, LVMH, and Bernard Arnault’s family holding company Financière Agache joined forces to create L Catterton. It was formed by merging Catterton’s private equity investment business in North and Latin America with LVMH and Financière Agache’s previous private equity investment and real estate businesses in Europe and Asia. Since then, L Catterton has become a global investment institution backed by the largest luxury brand LVHM. According to official disclosures, L Catterton currently manages approximately $34 billion in funds and has more than 200 investors worldwide, with offices in 17 locations globally. From 1989 to the present, they have made more than 250 investments, including well-known enterprises such as German centennial shoe brand Birkenstock, high-end trendy eyewear brand Gentle Monster, British custom pet fresh food brand Butternut Box, US lightweight camping trailer manufacturer Taxa Outdoors, sustainable home textile product manufacturer and retailer Boll&Branch, Danish fashion designer brand GANNI, and top Italian bicycle brand Pinarello.
Of course, China is also an important investment market for L Catterton. As early as 2012, L Catterton invested 300 million yuan in the Chinese local cosmetics brand, Perfect Diary. Perfect Diary successfully went public in July 2019, and L Catterton cashed out about 800 million yuan after the lock-up period expired.
Since then, L Catterton has accelerated its layout in China. In 2021, it participated in the 500 million US dollar strategic investment of YQS and the D-round financing of Heytea. In 2022, it invested in the pet brand Berna Pure and participated in the B-round investment of the high-end pet food brand Pat with “raw meat and bone formula”. In September of this year, it joined hands with Lyon Capital to complete a 200 million yuan B-round investment in the synthetic biology start-up company Chuangjian Medical. In today’s cooling trend of consumer investment, L Catterton undoubtedly brings a bright spot to the domestic consumer track.
However, the most eye-catching thing is that in October last year, L Catterton established the first RMB fund in Chengdu High-tech Zone, with a scale of more than 2 billion yuan. Chengdu is the consumption capital of western China, so it is not surprising to invest in L Catterton. Chengdu has the third-highest number of LV stores in the country, second only to Beijing and Shanghai. Even earlier media reports showed that the “LV Home” in Chengdu Taikoo Li had a monthly sales record of 350 million yuan and a quarterly sales record of 930 million yuan, ranking first among single stores in the country.
In mid-October of this year, at the “2023 World Cultural City Global Roadshow” held in Chengdu, Chang Shuai, Vice President of L Catterton Global Opportunities, said: “As an emerging fashion capital of China, Chengdu not only has a distinct and diverse aesthetic, but also has a natural love for lifestyle among consumers. They are happy to express their attitudes towards life through eating, drinking, and playing.” Chengdu, known for its lifestyle, naturally partners with the world’s largest consumer PE.
Finally, let’s go back to Thorne. Thorne’s management team disclosed that in 2022, they expanded their e-commerce capabilities in China through multiple platforms, especially on TikTok, where they ranked in the top ten for several months. They will continue to expand related business in 2023. With the support of L Catterton, entering the Chinese market offline is also something worth looking forward to.
