A Healthy Stock Play on Carlyle’s Acquisition of NBTY Inc. (NTY)

After watching Carlyle Group Co-founder David Rubenstein sit down with CNBC’s star Maria Bartiromo at the Aspen Ideas Conference last week, my sentiment turned more positive for the 2nd half of this year for mergers and acquisitions. Rubenstein highlighted more ‘equity-driven’ rather than highly leveraged purchases in the marketplace.

Fast-forward a week later and The Carlyle Group already acquired nutritional supplements maker NBTY Inc. (NTY) in one of the largest private equity deals of the year. Carlyle agreed to pay $3.8 billion in cash, or $55 per NTY share. The buyout price for NTY shares indicate a 47% premium on yesterday’s closing price. In the fiscal second quarter, NBTY Inc. increased their revenue by 18% to $705.1 million.

Taking the spotlight away from today’s shining deal announcement, I’d like to shed light on a recipient benefactor of the deal. In December of 2009, the Wall St. Cheat Sheet Premium Monthly Newsletter covered Vitamin Shoppe Inc. (VSI) as a watchlist stock pick. At the time, VSI shares were trading around $20. On June 25th of 2010, VSI shares hit $28 per share, or a 40% increase. Vitamin Shoppe is active on the retail store and direct marketing level of nutritional and vitamin products. With NBTY Inc on the supply side of the equation, it’s only a matter of time before the retailers start receiving the eye of potential suitors, depending on share value.

Today, Vitamin Shoppe (VSI) shares are trading up about 4% on the NBTY Inc. buyout news at around $25.33:

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