U.S. nutritional supplements maker NBTY Inc said it agreed to be bought by Carlyle Group for $3.8 billion in one of the biggest private equity deals so far this year.

Carlyle's $55.00 a share cash offer represents a 47 percent premium to NBTY's Wednesday close. Shares of NBTY jumped as much as 44 percent to their highest in three years, making the stock the biggest gainer on the New York Stock Exchange on Thursday.

The deal comes a day after reports of the company being courted by both Carlyle and rival PE firm Blackstone Group LP emerged.

The Ronkonkoma, New York-based company's board unanimously approved the deal. The agreement, however, has a go-shop provision, which means NBTY can scout for superior offers.

The company -- known for supplements such as Nature's Bounty, Solgar, Sundown, Ester C and Pure Protein -- sells vitamins, minerals, herbs, and sports drinks.

Wedbush Securities analyst Rommel Dionisio said private equity's interest in the company made sense as it was a leading global vitamin company with strong free cash flow.

The vitamin industry is a growth industry because it caters to the aging baby boomer population ... there are global growth opportunities for the company and they could grow through acquisitions as well, Dionisio said.

However, he was surprised by NBTY board's approval of the deal.

Frankly, that take-out multiple is so low. It is only 8 times EBITDA, Dionisio said, adding that given the low multiple, a higher bid from another financial or private equity buyer was a possibility.

Recent acquisitions in the personal care space had offered higher take-out multiples, like those of Bare Escentuals, which was offered 11 times EBITDA, and Chattem Inc, which was 12 times EBITDA, he said.

The stock had gotten up to $51.00 on its own in April. They missed a quarter so the stock sold off ... So it's hardly a premium to where they were three months ago.

Dionisio said that the board's hasty approval could be motivated by the prospect of organic sales deceleration in coming months, given difficult comparisons with the year-ago summer and fall, when consumers flocked to vitamin purchases in the wake of the swine flu scare.

NBTY, which has a market value of about $2.3 billion, posted a quarterly profit in April that missed market expectations by a wide margin, hurt by increased spending on television advertising.

The company's rivals include Nutraceutical International Corp , Perrigo and Schiff Nutrition International .

As of June 6, the company had outstanding debt of about $476.5 million.

GROWING PE APPETITE

Private equity deals, which were put on hold during the credit crisis due lack of cheap debt, have been making a revival.

However, private equity firms have largely restricted dealmaking to small- to mid-sized takeovers this year. In May, Silver Lake and Warburg Pincus agreed to buy financial data provider Interactive Data for $3.4 billion in cash.

Carlyle's offer for NBTY comes a week after the private equity firm along with co-investor Welsh, Carson, Anderson & Stowe sold healthcare services firm MultiPlan for about $3.1 billion.

The Carlyle Group managed $90.5 billion in assets across 67 funds as of March 31, 2010.

NBTY said the deal has been fully financed through a combination of Carlyle Partners equity, a $13.7 billion U.S. buyout fund and external debt financing provided by BofA Merrill Lynch, Barclays Capital and Credit Suisse.

BofA Merrill Lynch and Centerview Partners LLC are acting as financial advisers to NBTY, while Barclays Capital and Credit Suisse will offer financial advice to Carlyle.

(Reporting by Shradhha Sharma in Bangalore; Editing by Vinu Pilakkott, Saumyadeb Chakrabarty, Unnikrishnan Nair)

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