Liberty Tax agrees to acquire The Vitamin Shoppe

Published: 22-Aug-2019

The US$208 million acquisition fits in with US-based Liberty Tax’s strategy to acquire franchise-centric businesses

Liberty Tax has agreed to acquire The Vitamin Shoppe. The US omnichannel, speciality retailer of nutritional products will be sold in an all-cash transaction valued at approximately US$208 million. .

The definitive agreement is expected to be completed in Q4 2019, subject to approval by The Vitamin Shoppe’s shareholders, expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as well as other customary closing conditions.

Liberty Tax intends to finance the transaction with up to approximately $170m 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, said: “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.”

Cozza believes that The Vitamin Shoppe is a good fit for Liberty Tax’s previously announced strategy to acquire franchise-centric businesses.

Sharon Leite, CEO of The Vitamin Shoppe, said: “Following a careful and disciplined assessment, the board of directors has concluded that the acquisition proposal from Liberty Tax maximises value for our shareholders.”

The sale also provides an immediate premium to current shareholders.

Under the direction of its Board of Directors, Liberty Tax intends to continue to evaluate the acquisition of franchise-oriented or complementary businesses, including businesses that are not presently subject to franchising arrangements but that have the potential to be franchised in the future.

The Vitamin Shoppe transaction represents the continued evolution of the business model of Liberty Tax, and follows the recent acquisition of Buddy’s Home Furnishings, which was completed in July 2019.

In recognition of this new strategic focus, Liberty Tax previously announced its intention to change its name to Franchise Group. Liberty Tax anticipates that its name change will become effective in either Q3 or Q4 2019.

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