Vitamin Shoppe parent company going private in $2.6B management buyout
A group led by the company CEO is taking the parent company of The Vitamin Shoppe private.
Franchise Group which also owns Pet Supplies Plus, Buddy’s Home Furnishings, American Freight and more, is being acquired by a consortium that includes company CEO Brian Kahn (collectively with members of the senior management team), B. Riley Financial Inc. and private equity firm Irradiant Partners. Together, they will acquire 64% of the company’s issued and outstanding common stock not currently owned by members of the management team.
The group will pay $30 per share, in a deal valued at about $2.6 billion. Upon completion of the proposed merger, Franchise Group will become a private company and will no longer be publicly listed or traded on NASDAQ. Franchise Group’s management team, including Kahn, is expected to continue to lead the company. Franchise Group plans to continue to operate its current brand portfolio.
In March, Franchise Group, which operates more than 3,000 stores under its various banners, said it had received an unsolicited proposal for a buyout. It did not disclose any details about the buyer.
The agreement was unanimously approved by the Franchise Group’s board. It includes a 30-day “go-shop” period, during which the company can solicit alternative bids from interested parties.
Franchise Group acquired Vitamin Shoppe in 2019. Last year, Franchise Group emerged as the top bidder to acquire Kohl’s, but the department store chain decided to take itself off the selling block.
Read More: Kohl’s no longer for sale]
“This transaction is an exciting milestone for our company,” said Matt Avril, chairman of the board and the Special Committee of Franchise Group. “We believe the proposed transaction delivers immediate and certain value for public stockholders at a significant premium to the unaffected share price, and we have the flexibility to explore other potential transaction opportunities during the go shop period under the merger agreement.”
The proposed merger is anticipated to close in the second half of 2023, subject to satisfaction or waiver of customary closing conditions.
Jefferies LLC is serving as financial advisor to the Special Committee and Wachtell, Lipton, Rosen & Katz is serving as legal counsel to the Special Committee. Troutman Pepper Hamilton Sanders LLP is serving as legal counsel to Franchise Group.
Willkie Farr & Gallagher LLP is serving as legal counsel for Brian Kahn. Sullivan & Cromwell LLP is serving as legal counsel for B. Riley Financial, Inc. Davis Polk & Wardwell LLP is serving as legal counsel for Irradiant Partners.