The transaction is expected to be completed in the fourth quarter of 2019, subject to approval by The Vitamin Shoppe’s shareholders and other customary closing conditions. It will be an all-cash transaction, valued at approximately $208 million, which Liberty Tax will finance with up to $170 million in debt financing, available cash, and through the issuance of common stock of Liberty Tax. The Vitamin Shoppe shareholders will receive $6.50 per share, a premium of 43% to its closing share price on August 7, 2019.
Pat Cozza, an independent member of Liberty Tax’s Board of Directors, said in the press release: “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.”
Sharon Leite, CEO of The Vitamin Shoppe, said in the release: “Following a careful and disciplined assessment, the board of directors has concluded that the acquisition proposal from Liberty Tax maximizes value for our shareholders. The transaction also delivers long-term benefits to our associates, customers and business partners. It provides an immediate premium to our current shareholders and aligns The Vitamin Shoppe with a partner that shares our strategic vision to unlock the further potential of The Vitamin Shoppe as a leader in health and wellness. We are committed to transforming into an agile, customer-first organization that differentiates our brand through best-in-class quality, innovation and expertise across our products and services.”
In a separate press release, The Vitamin Shoppe announced the company’s second quarter results: a net loss per share of $0.15 compared to earnings per share of $0.22 in the same period last year; excluding special items, earnings per share was $0.20 in the second quarter, compared with $0.31 in the second quarter last year.
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- Total sales of $270.9 million, 7.6% lower than the same period prior year
- The company closed four stores
- Gross profit was $90.3 million, compared with $94.2 million in second quarter 2018
- Adjusted EBITDA in second quarter 2019 was $17.6 million and a margin of 6.5%, compared with $22 million and a margin of 7.5% in the same period last year.