The Vitamin Shoppe to be Acquired for $208M

Liberty Tax, soon to be renamed the Franchise Group, has inked a definitive agreement to acquire the Vitamin Shoppe in an all cash transaction. The Vitamin Shoppe conducts business through more than 750 company-operated retail stores under The Vitamin Shoppe and Super Supplements retail banners nationwide.

The Vitamin Shoppe operates more than 750 stores nationwide.

SECAUCUS, NJ—Locally-based retailer The Vitamin Shoppe is to be acquired by Liberty Tax Inc. of Virginia Beach, VA in a deal valued at approximately $208 million.

Liberty Tax, soon to be renamed the Franchise Group, has inked a definitive agreement to acquire the Vitamin Shoppe in an all cash transaction. The Vitamin Shoppe conducts business through more than 750 company-operated retail stores under The Vitamin Shoppe and Super Supplements retail banners nationwide. Liberty Tax Inc. is the parent company of Liberty Tax Service.

The Vitamin Shoppe shareholders will receive $6.50 per share, which represents a premium of 43% to its closing share price on Aug. 7, 2019, and a premium of approximately 59% to the 30-day volume weighted average price for the period ended on Aug. 7.

The transaction is expected to be completed in the fourth quarter of 2019, pending approvals.

Liberty Tax will finance the transaction with up to approximately $170 million in debt financing and a combination of available cash and/or through the issuance of common stock of Liberty Tax. In connection with the execution of the merger agreement, Liberty Tax entered into debt commitment letters with institutional lenders and an equity commitment letter with an affiliate of Vintage Capital Management, LLC.

Pat Cozza, an independent member of the Board of Directors of Liberty Tax, says, “We have great confidence in the value of The Vitamin Shoppe, its ongoing strategic reinvention plan and the outstanding efforts of The Vitamin Shoppe leadership team and associates. We believe that The Vitamin Shoppe is an excellent fit for Liberty Tax’s previously announced strategy to acquire franchise-centric businesses, and demonstrates the commitment of Liberty Tax, its board and management team to implement the previously announced strategic transformation of Liberty Tax.”

Liberty Tax, Inc. is the indirect parent company of Liberty Tax Service and Buddy’s Home Furnishings. In the U.S. and Canada, last year, Liberty Tax prepared approximately two million individual income tax returns in more than 3,100 offices and online. Liberty Tax also owns Buddy’s Home Furnishings, a specialty retailer engaged in the business of leasing and selling consumer electronics, residential furniture, appliances and household accessories. Liberty Tax is focused on the evaluation and acquisition of franchise-oriented or complementary businesses.

Sharon Leite, CEO of The Vitamin Shoppe, says, “Following a careful and disciplined assessment, the board of directors has concluded that the acquisition proposal from Liberty Tax maximizes value for our shareholders. The transaction also delivers long-term benefits to our associates, customers and business partners. It provides an immediate premium to our current shareholders and aligns The Vitamin Shoppe with a partner that shares our strategic vision to unlock the further potential of The Vitamin Shoppe as a leader in health and wellness. We are committed to transforming into an agile, customer-first organization that differentiates our brand through best-in-class quality, innovation and expertise across our products and services.”

Kirkland & Ellis LLP acted as legal counsel to The Vitamin Shoppe and BofA Merrill Lynch acted as its financial advisor. Troutman Sanders LLP acted as legal counsel to Liberty Tax.