Franchise Group, owner of nutritional supplements retailer The Vitamin Shoppe’s, has signed a definitive agreement to be acquired by a consortium management group led by CEO Brian Kahn.
The consortium also includes B. Riley Financial and Irradiant Partners. The deal is valued at $2.6bn.
The agreement is for the acquisition of about 64% of Franchise Group’s common stock that is currently not owned or controlled by the management group.
Under the terms of the agreement, the consortium will pay $30 a share to Franchise Group’s common stockholders for each share of common stock they hold in the company.
The company will be taken private once the transaction is completed. The existing management team, including Brian Kahn, will continue to lead it.
In March 2023, the company revealed that it received an unsolicited acquisition offer from an undisclosed third party.
Franchise Group board of directors and special committee chairman Matt Avril said: “The special committee and its advisors conducted an independent process and review of the strategic alternatives available to the company, with a focus on obtaining the best outcome for public stockholders.
“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 has received approval from the independent directors of the company’s board of directors.
Kahn said: “We are excited to have this opportunity to continue our business strategy of partnering with high quality franchisees, operators and financial institutions while also delivering certain value to our public stockholders despite a challenging business environment.”
Subject to customary closing conditions, the acquisition is expected to close in the second half of this year.
Franchise Group is an owner of franchised and franchisable businesses. In addition to The Vitamin Shoppe, its portfolio includes companies such as Wag N’ Wash, American Freight, Pet Supplies Plus, Badcock Home Furniture & More, Sylvan Learning and Buddy’s Home Furnishings.
Franchise Group operates more than 3,000 locations, mainly in the US.
The stores include company-run or operated under franchising and dealer agreements.