Kainos Capital to acquire Nutrisystem from Tivity Health for $575m

Kainos Capital has agreed to acquire Nutrisystem, a direct-to-consumer nutrition and weight management brand, from Tivity Health for $575 million.

The all-cash deal will also see the middle market private equity firm acquire South Beach Diet, which is part of the nutrition business of Tivity Health, a US-based provider of health fitness solutions.

Nutrisystem is claimed to offer a balanced and clinically proven approach to weight loss with portion-controlled foods designed particularly to address consumer requirements. The foods are directly delivered to customers’ doors.

Its portfolio of entrées, snacks, and shakes is backed by live counseling options, which include trained weight loss coaches, registered dietitians, and also certified diabetes educators.

Nutrisystem also offers a free digital app called NuMi for helping customers monitor their performance and also in meeting their goals.

Andrew Rosen – Managing Partner of Kainos Capital said: “We are excited to reestablish Nutrisystem as an independent company that is well positioned to help the significant portion of the U.S. population that wants to be healthier, yet struggles with weight management.

“For the approximately 40% of adults who are considered overweight – and increasingly at risk for a range of serious conditions – Nutrisystem can play an important role in helping improve quality of life. Nutrisystem is a valuable partner to its customers, particularly during the COVID pandemic when it is more challenging for many people to access affordable, healthy meals.”

Kainos Capital is being partnered in the acquisition by the private capital group of MSD Partners through a preferred and common equity investment.

Tivity Health is selling Nutrisystem just one and a half years after completing its acquisition. The company paid nearly $1.3 billion for acquiring Nutrisystem in a cash cum stock deal announced in December 2018.

Anthony Sanfilippo – Chairman of the Board of Directors of Tivity Health said: “Following a comprehensive review of the Company’s strategy and core capabilities, our Board of Directors and management team concluded that divesting the Nutrition Business through this transaction will best enable Tivity Health to focus its management team, resources and investment on its core healthcare business, to drive long-term, sustainable growth and increase shareholder value.”

Tivity Health plans to use the proceeds from the sale to cut down its debt. The proceeds from the deal will also give considerable additional financial flexibility to the company for supporting the growth of its healthcare business.

The deal, which is subject to customary closing conditions, is likely to be closed in the fourth quarter.