Flexstone Partners has participated in the takeover of NutriSystem, a leader in the weight management industry. The co-investment specialist, an affiliate of Natixis Investment Managers, participated $10m out of the total takeover price of $575m.

The purchase of NutriSystem is one of several deals that Flexstone have participated in alongside lead investor, Kainos Capital, which specializes in acquiring and managing food and consumer businesses.

The investment fits with Flexstone’s guiding philosophy of co-investing only when a deal is within the “sweet spot” of the lead investor. That is, where the investor has a specific proven skillset. “We have known the lead investor a long time,” said David Marcus, managing director at Flexstone. “They are specialists in the food space and know the weight management market very well.”

In 2014, Kainos made a successful investment in Slimfast, a competitor of NutriSystem, selling its stake in Slimfast in 2018. Marcus added: “There are nuances in what those two companies do, but the companies have similar target markets, so we feel that Kainos will be able to execute this deal well.”

NutriSystem, one of the biggest direct-to-consumer nutrition and weight management brands, has been in business for more than 45 years. It offers scientifically backed weight loss plans, as well as support and counselling options from weight loss coaches, registered dietitians and certified diabetes educators.

Kainos and its co-investors plan to add value to NutriSystem through revamping its marketing efforts, and shifting advertising spend from older media, such as TV, to new online media. It may also refresh some of NutriSystem’s marketing messages, and source higher-quality ingredients.

The expected holding period for Flexstone is between four and five years. “One of Kainos’ strengths is it identifies value creation levers early and pull them as soon as it can after investment,” said Marcus. “Historically, this has allowed Kainos to exit companies faster than the average private equity firm.”

For further reading:
About Flexstone Partners (“Flexstone”)
Flexstone is a leading investment solutions provider in private assets with a global reach and local footprints in New York, Paris, Geneva, and Singapore. It specializes in the selection of private equity, private debt, real estate, and infrastructure fund managers for investment by Flexstone’s clients.

Flexstone manages primary and secondary investments as well as co-investments. Flexstone’s expertise is distinguished by a high flexibility in building customized portfolios that are tailored to the unique needs and constraints of each investor whether institutional or private individual. Flexstone offers a large range of services, from advising on private assets portfolio construction to the management of fully discretionary separate accounts and funds of funds.

Flexstone, with more than 40 professionals, manages or advises $8.1 billion.* It is a majority owned subsidiary of Natixis Investment Managers, one of the largest investment managers worldwide.
Further information: www.flexstonepartners.com

* Source: Flexstone Partners at 08/31/2020. Assets under management and advisory made up of commitments for closed-end private placement funds, and sum of Net Asset Value and unfunded commitments otherwise.

Flexstone Partners
An affiliate of Natixis Investment Managers

Flexstone Partners, SAS – Paris
Investment management company regulated by the Autorité des Marchés Financiers. It is a simplified stock corporation under French law with a share capital of 1,000,000 euros Under n° GP-07000028 –Trade register n°494 738 750 (RCS Paris)
5/7, rue Monttessuy,
75007 Paris

Flexstone Partners, SàRL – Geneva
Independent (unregulated) asset manager, under Swiss Federal Act on Collective Investment Schemes (“CISA”), supervised by Commission de haute surveillance de la prévoyance professionnelle (“CHS PP” and regulated by the Swiss Financial Market Supervisory Authority (“FINMA”) under Anti Money Laundering requirements. It is a limited liability company with a share capital of 750 000 CHF.
Trade register n° CH-660-0180005-1
8 chemin de Blandonnet
Vernier 1214 Geneva

Flexstone Partners, LLC - New York
Delaware corporation, registered with the United States Securities and Exchange Commission as an investment adviser
28th floor of 745 Fifth Avenue, New York, NY 10151.

Flexstone Partners, PTE Ltd - Singapore
61 Robinson Road, #08-01A Robinson Centre
Singapore 068893

Natixis Investment Managers
RCS Paris 453 952 681
Share Capital: €178 251 690
43 avenue Pierre Mendès France
75013 Paris

This communication is for information only and is intended for investment service providers or other Professional Clients. The analyses and opinions referenced herein represent the subjective views of the author as referenced unless stated otherwise and are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material.

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