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Kainos Capital to acquire Nutrisystem

Kainos Capital, a private equity firm focused exclusively on the food and consumer industry, is to acquire Nutrisystem, a direct-to-consumer nutrition and weight management brand, from Tivity Health for USD575 million. For over 45 years, Nutrisystem’s clinically proven plans have helped millions of people lose weight safely and effectively. Nutrisystem provides a balanced and clinically proven approach to weight loss with portion-controlled foods specifically designed to meet consumer needs that are conveniently delivered directly to customers’ doors. The Company’s portfolio of entrées, snacks, and shakes is complemented by various live counselling options, including trained weight loss coaches, registered dietitians and certified diabetes educators that are available seven days a week. Nutrisystem also provides a free digital app, NuMi, that helps customers track performance and achieve their goals. 

The Kainos team has invested in a number of businesses within the health and wellness space including SlimFast, which it acquired from Unilever in 2014 and sold to Glanbia plc in 2018.  During Kainos’ ownership, SlimFast became the fastest-growing brand in the weight management category at retail for three years in a row. The Private Capital Group of MSD Partners, LP is partnering with Kainos Capital in this transaction in the form of a preferred and common equity investment.
Andrew Rosen, Managing Partner of Kainos, says: “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 per cent 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.”
Bob Sperry, a Partner of Kainos, says: “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 program 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 center 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, says: “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 transaction is expected in the fourth quarter, subject to customary closing conditions.
Rabobank is providing debt financing for the transaction and is acting as financial advisor to Kainos (through Rabo Securities USA, Inc). Winston & Strawn is serving as legal counsel to Kainos.

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