Vitamin Shoppe (VSI) Stock Rockets On Acquisition News

Vitamin Shoppe VSI Stock News

Vitamin Shoppe Inc (NYSE: VSI) is rocketing in the market this morning, trading on gains of more than 40% this morning. The gains come after the comapny announced that it would be acquired by Liberty Tax (OTCMKTS: TAXA). Here’s the scoop:

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VSI Stock Is Climbing On Acquisition By TAXA

In a press release issued early this morning, Vitamin Shoppe said that it has entered into a definitive agreement with Liberty Tax. The agreement surrounds the acquisition of the Vitamin Shoppe by Liberty Tax.

According to the release, the deal will be an all cash transaction with a value of more than $200 million. Shareholders will receive $6.50 per share. This price represents a premium of 43% over the closing price yesterday and 59% over the 30-day volume weighted average price for the period ended yesterday.

In the release, VSI said that it expects for the transaction to be completed in the fourth quarter of 2019. Of course, the transaction is subject to approval by shareholders as well as other customary and regulatory closing conditions.

In order to fund the acquisition, Liberty Tax will be taking out $170 million in debt and fund the rest through available cash and the issuance of common stock.

In a statement, Pat Cozza, a member of the Board at Liberty Tax, had the following to offer:

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.

The above statement was followed up by Sharon Leite, CEO at VSI. Here’s what she had to offer:

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.

A Couple Things To Keep In Mind

This acquisition is contingent on a couple of things. Shareholder and regulatory approval will be the biggest factors. Also, it’s important that Liberty Tax is capable of raising the funds required for completion.

Nonetheless, based on agreements signed with institutional shareholders, Liberty Tax shouldn’t have a problem coming up with the funding and I don’t see why VSI shareholders would turn down such a strong premium. So, things are looking good from the start of this deal!

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