Isle diet-product firm sold

By Rob Perez
Star-Bulletin

A Tennessee company has agreed to purchase most of the assets of Maui-based Sunsource International Inc., a dietary supplement maker, for stock and cash.

The price was not disclosed, but Bloomberg News said the deal would be about 1-1/2 times Sunsource's annual sales of $25 million, or about $37.5 million.

Chattem Inc., which makes health and beauty care products, said the deal is consistent with the company's plans to grow through acquisitions.

Sunsource products, including Garlique, a garlic extract, and Melatonex, a sleep aid, are big sellers in the fast-growing dietary supplement market, according to Chattem.

Sales of the Sunsource products to be acquired totaled $25 million last year, up from $18 million in 1995, Chattem said. The products are targeted to older consumers.

Officials from both companies, which were closed today because of the Memorial Day holiday, were not available for comment.

Chattem said privately held Sunsource has built a loyal customer base through radio, television and print advertising and has a strong reputation as a leader in the branded dietary supplement market.

Sunsource is based in the Maui Research and Technology Park. Its founder, Dr. Robert Sohn, died in January.

Chattem expects the acquisition, which must be approved by government regulators, to close by June 30.

The deal was announced Friday and helped send Chattem's stock up nearly 20 percent, hitting a 52-week high of $10 on the Nasdaq market.

Chattem last year earned $3.3 million on sales of $118.9 million.