A Dallas-based private equity firm adds another national brand to its portfolio of food companies.
Kainos Capital announced Monday that it had acquired Nutrisystem from Tivity Health, Tennessee, for $ 575 million. Kainos teamed up with Michael Dell's MSD partners on the deal.
The deal price is less than half what Tivity Health paid for Nutrisystem in March 2019 when it bought the brand for $ 1.3 billion.
Nutrisystem is one of the best known direct nutrition and weight management companies in the country. It has been delivering portioned starters, snacks and shakes to customers' doors for 45 years. It also offers advice with weight loss coaches, dietitians, and diabetes educators.
An estimated 40% of adults are considered overweight, according to the Centers for Disease Control and Prevention.
That makes Nutrisystem even more important during the COVID-19 pandemic, "when many people find it harder to get access to affordable, healthy meals," said Andrew Rosen, Managing Partner of Kainos, in a statement.
For the first six months of this year, Nutrisystem's direct sales increased significantly over the same period last year – $ 320 million versus $ 204 million. According to Tivity, the deal also includes the South Beach Diet brand, which had sales of $ 21 million as of June 30.
"We are excited to re-establish Nutrisystem as an independent company well-positioned to serve a significant portion of the US population who want to be healthier and still have weight management issues," said Rosen.
Kainos previously owned SlimFast, which it sold to an Irish company for $ 350 million in 2018. The portfolio now includes Kettle Cuisine, Good 2 Grow, Ferraro Foods, JJ & # 39; s Bakery and BeautyBio, a skin care company led by Dallasite Jamie O’Banion.
The acquisition of Nutrisystem is expected to be completed before the end of this year.
Tivity, a publicly traded company headquartered in Franklin, Tennessee, bought Nutrisystem with the idea of combining its existing fitness programs for seniors with weight loss options.
Earlier this year, the company posted a $ 377 million loss on the value of its nutrition division and hired a consultant to investigate a sale, according to the Nashville Post. Since then, the company has recorded an additional impairment loss of nearly $ 200 million on the value of Nutrisystem.
Tivity said it will use the sales proceeds to pay off debts and team up for its healthy life for seniors. It owns a senior fitness program, Silver Sneakers, and the Wisely Well nutrition brand for older adults.
"Our health care business is naturally benefiting from the tailwind from Medicare Advantage, with Medicare Advantage beneficiaries expected to grow by approximately 10% in 2021," CEO Richard Ashworth said in a statement.