Tivity Health is buying weight management company Nutrisystem in a cash and stock deal the companies value at an obese $1.4B.
The Tennessee-based Tivity expects to maintain Nutrisystem, and its Pennsylvania location, as well as its other brands that include the South Beach Diet..
Crossfit for seniors
Tivity is the parent of fitness program SilverSneakers (workout classes that focus on customers age 50 and older), and now the company hopes to make gains by helping people manage their weight.
For the year ending Sept. 30, Tivity pumped out $593m in revenue, and ended with a market value of $1.6B.
But, that all changed after the handshake. The fitness conglomerate lost about a third of its market value as investors reportedly balked at the deal, which was designed to give Tivity shareholders an 87% stake in the combined company.
What’s up investors’ (flat) butts?
Nutrisystem has fallen 35% this year and, according to Bloomberg, went “ex-dividend” last month — so there’s that.
Plus, Investors have reportedly stated concern over how Tivity will work Nutrisystem into its system.
Though, Axios reports Tivity may see an opening to include Nutrisystem in its Medicare Advantage plan as SilverSneakers classes are often an added benefit.