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On Sept. 2, Greenwich, Connecticut-based Blyth Inc. announced that the company had reached an agreement to sell the majority of its ViSalus subsidiary to the founders and certain other preferred stockholders of ViSalus. They completed the transaction, which involved exchanging shares of redeemable convertible preferred stock of ViSalus for shares of ViSalus common stock, on Sept. 4. Blyth now owns approximately 10 percent of ViSalus. DSN sat down with Co-Founder and Chief Marketing Officer of ViSalus Blake A. Mallen to discuss the deal. Here’s what he had to say.
DSN: Start at the beginning for us. This is quite a transaction. How did it all come about?
BAM: Yes, it’s obviously a big move. We think the ViSalus story is made up of three big “All In” moments. In the beginning, it was definitely kind of an “All In” spirit that gave rise to the company back in 2005. Nick (Sarnicola), Ryan (Blair) and I took all the money we had back then and acquired the assets of a failing company and birthed the idea of ViSalus and our mission. We had very humble beginnings—about 18 months or so without a single paycheck.
We had developed a great relationship with the Goergen family and Blyth when Nick, Ryan and I were still young executives in our mid-20s. By 2008, we felt that joining Blyth was the best move for ViSalus in order to provide a lot of the infrastructure and the operational expertise to help us accomplish what we wanted for the long term. So we created a partnership and a great relationship.
Shortly after we announced the deal with Blyth in 2008, the economy collapsed and Nick, Ryan and myself again took our last money that we had at the time to self-fund the company, and reinvent in 2009—our second “All In” moment. The irony is that this moment gave birth to the Body by Vi 90 Day Challenge, which is the brand that made us who we are today with the meteoric rise over the last few years.
Now we’re in a rebuilding and expansion mode, and we wanted to go all in again, so we approached Blyth a couple of months ago with the idea to buy back all the remaining shares that Blyth owned, minus 10 percent. They saw our passion, and they know we’re founders and ViSalus is our baby, and running it is something we want to do for life.
This last transaction is our third “All In” moment. Most of the transaction included money owed to us in the original agreement with Blyth. Basically, we walked away from it and rolled it back into the company. We took back, between us and our field, 90 percent of ViSalus. We’re all excited to have full ownership back and a new beginning and a new birth.
DSN: So when you look at that new beginning and new birth, how does this ownership change better position ViSalus?
BAM: Focus is probably the best word to use, and regaining the ability to put our resources 100 percent into things we believe will bring value to our customer and the promoter. Right now our focus is to be aggressively expanding all over Europe, and of course creating a new energy wave all over North America, and we really want all of our energy going into what adds value.
The initial deal with Blyth created a finish line; and we just realized, over time, that we don’t want a finish line. That’s a big point to make. We’ve accomplished what a lot of entrepreneurs would hope to accomplish, yet we’re pushing it all back in to go out there and do it again because it’s what we’re passionate about.
It’s really a story of belief and commitment… Belief in what we are capable of, belief in our partnership, belief in our business, belief in our leadership and our promoters, and belief in that what we’ve done is only a small percentage of what we’re going to do, and we want to do it for the rest of our lives. So, that’s more what this move means to me on a more personal level.
I would expect to see not only a renewed energy or renewed enthusiasm between myself, Nick and Ryan, but also that radiates throughout the whole ViSalus community, just based on the feedback we’ve already gotten.
DSN: You mentioned international expansion, and we’ve seen ViSalus add three new markets this year and you are looking at adding a couple more in 2015. Does your international expansion strategy accelerate at this point?
BAM: Our expansion strategy was already well under way, and I don’t know that this has any effect on our plans. U.K. was our first market outside North America, and we waited a year in that before we opened Germany, Austria, and Ireland this year and expanded into different languages. We’re building our operational muscle, and now we can go out there and pick up the pace without diverting focus.
DSN: You have the Vitality event next week (Sept. 12-13); do you have big plans to formally announce this news?
BAM: Yes, we’re going to be really telling the story. People look at the company and they bucket it as a company or a product or a comp plan, and they don’t realize that a company is really a community of people. So we’re going to go on stage Friday night and tell the full story of the “All In” moments and why we’re doing what we’re doing.
Bob Goergen is coming out, which will be exciting. Blyth maintains 10 percent and Bob is the Chairman, so we plan to do something special for him as a thank you for everything he’s provided to us, in terms of mentorship and grooming us as executives and teaching us how to build a global business.
Before we were in the relationship with Blyth, we were a scrappy startup. Now we have a world-class finance team, everything on operations and reporting, world-class legal, tax best practices—a lot of the true back-end and operational functions. Blyth helped us build a solid backbone behind the scenes for us to build upon.
DSN: You all went to the Blyth team just a few months ago, and this transaction came together that quickly. That seems remarkable. Were you expecting it to move that smoothly and quickly?
BAM: I don’t think we had an expectation on the time frame; it was just a win/win/win situation, so it moved pretty quickly. For Blyth, it’s a win when it comes to their shareholders—obviously the stock has jumped quite a bit in the last couple of days. It’s a win for ViSalus in terms of us being allowed to have our entrepreneurial freedom and ownership and control over our destiny. I think it’s also a big win for all of our promoters who are now able to rebuild and move forward in that new spirit.
DSN: Talk a little bit about the health and wellness sector—what trends are you watching, apart from this transaction?
BAM: Our strategy has always been to be the largest healthy fast food provider in the world. Fast food has proliferated all over the world for obvious reasons—it’s simple, it’s fast, it’s super convenient, it tastes good and it’s cheap! And people need to eat, right? Our goal is to approach the market to provide the consumer with very similar benefits—simple, fast, convenient, good taste, affordability—but to obviously do it in a nutritious, healthy way.
We’re also seeing a big, big move when it comes to nutritious, on-the-go, all-natural snacking. That’s our next move when it comes to our product strategy. We already have two meals, with our shake and our Crunch—but now we’ll be moving into what people are doing in between meals.
DSN: Is there anything else you’d like to share with our readers?
BAM: The core of the Vi foundation has always been the entrepreneurial spirit. You know, we’ve always had a bit of a disruptive approach when it comes to innovation, whether it be technology or our culture. That entrepreneurial spirit, or swagger, was what made us who we were. And I think somehow over the course of the last couple of years as we’ve become a bigger company, it’s been harder to maintain that culture.
So, our main focus is to bring that back—the entrepreneurial spirit and that kind of disruptive attitude and infuse that back into the culture both inside the walls and outside the walls.