The direct-to-consumer nutrition and weight management brand has been sold for $575 million
Weight loss concept

Dallas-based Kainos Capital, a private equity firm focused exclusively on the food and consumer industry, is acquiring the direct-to-consumer nutrition and weight management brand Nutrisystem from Tivity Health for $575 million. MSD Partners’ Private Capital Group is partnering with Kainos Capital in the transaction in the form of a preferred and common equity investment.

Headquartered in Fort Washington, Pennsylvania, Nutrisystem provides portion-controlled foods delivered directly to the customer’s door. The company offers a selection of entrées, snacks, and shakes and also provides live counselling from weight-loss coaches, dietitians and diabetes educators, as well, as the NuMi free digital app, which helps customers track their performance and achieve their weight goals.

Kainos has invested in a number of health and wellness businesses, including SlimFast, which it acquired from Unilever in 2014 and sold to Glanbia in 2018.

Growth potential

Andrew Rosen, managing partner of Kainos, said Nutrisystem is well positioned to help the significant portion of the US 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,” he said. “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 partner Bob Sperrya added: “We look forward to working with the Nutrisystem management team to achieve the full potential of this incredible brand similar to what we accomplished with SlimFast.

“Nutrisystem offers its customers a complete, cost-effective weight loss programme that is proven, great-tasting, and incredibly convenient, with no initiation or recurring membership fees.

Customers don’t need to leave their homes to travel to a weight loss centre for scheduled appointments, and they don’t need to weigh their food or count calories. Everything customers need to accomplish and sustain their weight management goals is delivered right to their doors. Nutrisystem provides the most effective and convenient weight loss platform to help customers lead healthier, happier lives.”

John Civantos, co-head of the Private Capital Group of MSD Partners, said: “We have tremendous respect for the franchise Kainos has built in health and wellness brands and are thrilled to be partnering with them in the acquisition of Nutrisystem. This investment is a perfect example of both MSD’s application of deep domain expertise in technology-driven, direct-to-consumer businesses, and our unique ability to construct creative, flexible capital solutions at scale.”

Date published: 19 October 2020

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