Liberty Tax Announces $208 Million All-Cash Acquisition of The Vitamin Shoppe

On August 8, 2019, VCBeat (WeChat ID: vcbeat) learned from foreign media reports that Liberty Tax, headquartered in Virginia Beach, Virginia, announced it would acquire The Vitamin Shoppe, which operates 750 stores, in an all-cash transaction valued at approximately $208 million. Under the terms of the agreement, shareholders of The Vitamin Shoppe will receive $6.50 per share, representing a 43% premium over the closing price of $4.54 on August 7, 2019.

Liberty Tax Service is a U.S.-headquartered tax services company that specializes in providing tax preparation services for individuals and small businesses. Liberty Tax is the parent company of Liberty Tax Service and Buddy's Home Furnishings.

“We believe The Vitamin Shoppe is a strong fit for Liberty Tax’s franchise-centric acquisition strategy,” said Board Member Pat Cozza. Mr. Cozza stated that Liberty Tax will continue to evaluate acquisitions and pursue business synergies, including operations not currently under franchise agreements but with the potential to be franchised in the future.

The Vitamin Shoppe, founded in 1977, is a chain of health and wellness stores selling vitamins, minerals, herbs, dietary supplements, and sports nutrition products. The company reported a net loss of $252.1 million in 2017, which narrowed to $3.7 million in 2018.

“After careful and rigorous evaluation, the Board has concluded that Liberty Tax’s acquisition proposal maximizes shareholder value. The transaction also delivers long-term benefits for our employees, customers, and business partners. It provides an immediate premium to our existing shareholders and enables The Vitamin Shoppe to share our strategic vision with a partner committed to unlocking further potential as a leader in health and wellness. We have remained dedicated to transforming into an agile, customer-centric organization, differentiating our brand through our products and services, superior quality, innovation, and expertise,” said Sharon Leite, CEO of The Vitamin Shoppe.

Vintage Capital Management is one of the largest owners of Liberty Tax and The Vitamin Shoppe, with representation on both companies’ boards of directors. It is also a major shareholder in Buddy’s Newco LLC, which was acquired by Liberty Tax last month and is the owner of the lease-to-own franchisor Buddy’s Home Furnishings.

It is reported that the transaction involving The Vitamin Shoppe is expected to be completed in the fourth quarter of 2019.

In this transaction, Kirkland & Ellis LLP served as legal counsel to The Vitamin Shoppe, BofA Merrill Lynch acted as its financial advisor, and Troutman Sanders LLP served as legal counsel to Liberty Tax.

The Vitamin Shoppe is an online and brick-and-mortar retailer of health and wellness products, specializing in vitamins, minerals, and sports nutrition supplements. The company operates more than 600 stores in the United States and has expanded into Canada, Panama, and India. Founded in 1977, The Vitamin Shoppe is headquartered in North Bergen, New Jersey.

Liberty Tax is a U.S. company that specializes in preparing tax returns for individuals and small businesses. The company was founded in Canada in 1997, when John Hewitt, co-founder of Jackson Hewitt, acquired the Canadian tax franchise U&R Tax Depot. In 1998, it became Liberty Tax Service and opened five offices in the United States. Liberty Tax Service is the primary subsidiary of Liberty Tax, Inc., a company traded on the NASDAQ.

(Compiled by Xu Wenjuan)