|Founded||March 1, 2005|
|Headquarters||Los Angeles, CA, USA|
|Number of locations||2|
|Area served||USA, Canada, UK|
|Key people||Ryan Blair, CEO and co-founder
Blake Mallen, CMO and co-founder
Nick Sarnicola, sales chief and co-founder
ViSalus Sciences is a multilevel marketing company based in Los Angeles, California, with offices in Troy, Michigan. The company markets weight management nutritional products, dietary supplements and energy drinks in the United States, Canada and UK through a network of approximately 76,000 independent distributors. Weight management products, including Vi-Shape meal replacement shake and Vi-Trim Clear Control Drink Mix, form the bulk of the company's sales.
ViSalus Sciences was originally started in 1997 by Nick Sarnicola and Blake Mallen, two distributor with The Free Network, LLC, a telecommunications multi-level marketing (MLM) company based in Troy, Michigan. After The Free Network folded in March 2005, ViSalus was purchased by wireless Internet developer Ryan Blair with investment from Ropart Asset Management, a private equity firm owned by Robert B. Goergen. Sarnicola and Mallen were retained as sales chief and CMO, respectively. The company was moved to the San Francisco Bay Area.
The 2008 recession put ViSalus near bankruptcy, with the business $6 million in debt. In 2008, ViSalus was acquired by Blyth, Inc., a multi-level marketing company that sells home decor which had been founded by Georgen. In the first stage of the takeover – completed in 2008 – Blyth purchased a 43.6% equity interest for $14.0 million. By 2010 the company had returned to profitability, and ViSalus was making over $15 million a month. Blyth completed the second phase of the takeover in 2011, investing an additional $2.5 million and increasing their ownership share to 57.5%.
In August 2012, Blyth – which then owned a 73% share of Visalus – planned to spin off the company in an initial public offering of shares worth up to $175 million. In September 2012, Moody's Investors Service downgraded Blyth's credit from "stable" to "negative," ViSalus reported extremely high growth rates in 2012, being audited at 450%, which made it one of the fastest growing companies of its size. Despite this, Blyth stated that the company's growth was not properly valued. Blyth withdrew the Visalus IPO citing uncertain market conditions.
In September 2014, ViSalus announced that it had become a private, independent company. ViSalus arranged a transaction with Blyth to convert the company's stock to common stock, although Blyth remains an equity holder with 10% of ViSalus's stock. The transaction eliminated Blyth's obligation to pay the co-founders $143.2 million as part of the 2008 acquisition. At the time of the transaction, ViSalus' earnings and revenue had declined from a high-point in 2012, and the company had been operating at a loss for 2013 and the first two quarters of 2014.
In October 2013, charges were filed in US Federal Court that Nick Sarnicola and Blake Mallen on behalf of ViSalus committed Racketeer Influenced and Corrupt Organizations Act (RICO) violations, and engaged 3rd party individuals to commit criminal acts, extortion, among other violations against Fred Ninow & Ken Dunn of Ocean Avenue.
Pyramid scheme accusations
ViSalus was investigated by the Southern Investigative Reporting Foundation which published a detailed report that assailed the company's business model and high probability that investors will lose their money in the scheme.
Weight-management products, including Vi-Shape meal replacement shake, Visalus Go Instant Energy and Vi-Trim Clear Control Drink Mix, form the bulk of the company's sales. Other products include Neuro, an energy drink, and Vi-Pak, an energy supplement, which were both developed by Michael Siedman, an ear, nose, and throat specialist. Visalus promotes its products with the Body by Vi Challenge, a program where people set weight-loss and physical fitness goals to be achieved over a 90 day period.
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