Tivity Health to buy weight management firm NutriSystem Inc in $1.4B deal

Fitness and health improvement programs provider, Tivity Health Inc (NASDAQ:TVTY) is buying weight-management firm NutriSystem Inc (NASDAQ:NTRI) in a cash and stock deal that values the company at about $1.4 billion, the firms announced jointly Monday. Nutrisystem shareholders will get $38.75 per share in cash and 0.2141 Tivity Health shares for each share of NutriSystem common stock. The transaction values Fort Washington-based NutriSystem at an enterprise value of $1.3 billion and an equity value of $1.4 billion, or approximately $47 per share. READ: NutriSystem reports US$191.3mln in second quarter The companies said that Tivity shareholders should own about 87% of the combined company when the deal is completed. Tivity said it expects “double-digit accretion” to Tivity Health's adjusted earnings in 2020 and beyond, and “significant” annual cost savings of about $30 million to $35 million. Shares in Franklin, Tennessee-based Tivity Health were unchanged in premarket trade Monday, but NutriSystem sprinted 28.9% to $44.10 before the opening bell. "The acquisition of NutriSystem is an exciting and transformational event for Tivity Health as we expand our portfolio of healthy lifestyle brands," said Tivity Health CEO Donato Tramuto. "Tivity Health has the opportunity to accelerate its already impressive growth with the addition of NutriSystem. Our combined platform has the potential to attract new users, increase enrollment, and enhance engagement among the members of both companies,” added Tramuto.Tivity Health is the parent of fitness program SilverSneakers and focuses on customers that are ages 50 and older. NutriSystem is the parent for both NutriSystem itself and the South Beach Diet, a low-carb and high-protein eating plan. The firms said that combined, they would have had pro forma revenue of about $1.3 billion for the year that ended September 30. NutriSystem’s chief executive, Dawn Zier, will become Tivity’s president and chief operating officer and join Tivity’s board when the deal is finished, the companies said. Donato Tramuto will stay on as Tivity’s CEO. Tivity is also planning to keep NutriSystem’s home location in Fort Washington, Pa., along with NutriSystem brands.   Contact Uttara Choudhury at uttara@proactiveinvestors.com Follow her on Twitter: @UttaraProactive 
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