Kainos Capital to acquire weight-loss brand Nutrisystem for $575m

US-based private equity firm Kainos Capital has agreed to purchase nutrition and weight management brand Nutrisystem for $575m from Tivity Health.

The purchase price is less than half what Tivity Health paid for Nutrisystem in March 2019, when it paid $1.3bn to acquire the brand.

Nutrisystem has been offering ‘balanced and clinically’ proven approach to weight loss with portion-controlled foods to its customers.

Its portfolio includes entrées, snacks, and shakes that are said to be complemented by various live counselling options.

Kainos Capital managing partner Andrew Rosen said: “We are excited to reestablish Nutrisystem as an independent company that 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.

“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.”

The Kainos team, which focuses exclusively on the food and consumer industry, is said to have invested in several businesses.

In 2014, the team acquired SlimFast from Unilever and later sold to Glanbia in 2018.

For this deal, Kainos Capital also secured support from MSD Partners Private Capital Group in the form of a preferred and common equity investment.

MSD Partners Private Capital Group co-head John Civantos 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.”

Completion of the deal is subject to customary closing conditions and is expected to be completed in the fourth quarter.

Rabobank has agreed to provide debt financing for the deal and is also acting as financial adviser to Kainos while Winston & Strawn is serving as legal counsel to Kainos.

In July, Kainos Capital portfolio company Olde Thompson has expanded its presence in the US spices and seasonings segment with the acquisition of Gel Spice for an undisclosed sum.

Based in Bayonne, New Jersey, Gel Spice manufactures and imports spices, seasoning, bakery ingredients and speciality items for retail, foodservice, industrial and export channels.