The shareholders of Vitamin Shoppe will receive $6.50 per share as part of the deal. The total consideration of the deal is approximately $208m.
The company will finance the transaction with up to approximately $170m in debt financing and a mix of available cash and/or through the issuance of common stock of Liberty Tax.
Liberty Tax has also signed debt commitment letters with institutional lenders and an equity commitment letter with an affiliate of Vintage Capital Management as part of the merger agreement.
Liberty Tax board of directors independent member Pat Cozza 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.
“We believe that The Vitamin Shoppe is an excellent fit for Liberty Tax’s previously announced strategy to acquire franchise-centric businesses, and demonstrates the commitment of Liberty Tax, its board and management team to implement the previously announced strategic transformation of Liberty Tax.”
The transaction is currently subject to the approval by The Vitamin Shoppe’s shareholders, expiration or termination of the applicable waiting period, and other customary closing conditions. It is expected to be completed in the fourth quarter of this year.
Kirkland & Ellis served as legal counsel to The Vitamin Shoppe and BofA Merrill Lynch as financial advisor. Troutman Sanders acted as legal counsel to Liberty Tax.
As announced previously, Liberty Tax expects to change its name to Franchise Group in the third or fourth quarter of this year.