Two out of the top three supplement brands have been acquired by larger companies. These two companies were Optimum Nutrition (sales were 185 mln) and BSN (sales were 135 mln). The other company in the top 3? MusclePharm.
Using the buyout prices these two companies received as related to their annual sales, and estimated 100 mln in MP sales, this gives us a buyout price today of around $21 / share.
I don't buy stocks because of the likelihood of a buyout, but given that 2 out of the top 3 have been bought out, and MP is the third, I would say that the potential for a buyout of this company is very high. GLTA.
I would agree that they are very like to get offers for an acquisition, but I doubt that they will be taken unless it's a very generous offer. Musclepharm is changing the industry and growing a very large cult following. They are far ahead of their peers in new product development, and trump others in their marketing strategies. If you read reviews on their products on bodybuilding website or look over what people are saying about them on their facebook page, you will see first hand they are unlike any other in this industry before. Their customers are very devout to their mission and remind me of customers who are in awe of their favorite companies (Amazon, Apple, Underarmour, Starbucks). People love their experience with the products and the lifestyle the company promotes.
People can talk here and there in the short term, but this company is positioning itself for a strong sustainable future and I was pleased to see their margins increase substantially in Q1, which was impressive given what I was hoping for. With Estalella coming in I think he will greatly increase the efficiency of their global supply chain, which will further increase the revenue growth (As mentioned in the last conference call they are anticipating expansion internationally to 50% of total sales revenues. This is something else where they are destroying domestic competitors and is most certainly a competitive advantage.) Once they are one of the major exchanges (NYSE or Nasdaq) and follow up 2013 with solid top and bottom line growth, this baby is going to take off and you will see many institutions biting for a piece of the action.