Vitamin Shoppe’s $70 million three-year term loan partially repaid

By Sarah Lizee

Olympia, Wash., June 1 – Vitamin Shoppe’s $70 million three-year senior secured term loan has been partially repaid by new parent company Franchise Group, Inc., according to a press release.

Since closing the acquisition of Vitamin Shoppe on Dec. 16, Franchise Group has now repaid, or acquired for its own account through a wholly owned subsidiary, more than $22 million of the original $70 million term loan.

“On May 22, we had the opportunity to acquire and effectively retire an additional $5.325 million of our highest interest rate tranche debt, bringing total repayments and acquisitions up to $22.075 million since closing the acquisition of the Vitamin Shoppe in December,” Brian Kahn, chief executive officer of Franchise Group, said in the release.

“Our year-to-date performance and strong working relationship with our lenders have allowed us to accelerate the elimination of the term loan used in the acquisition financing.

“Additionally, we have agreed with our lenders to make another previously unscheduled prepayment of $12.5 million, which we anticipate making in the third quarter of 2020. By the end of 2020, in Franchise Group’s first full year of ownership of the Vitamin Shoppe, we estimate that we will have effectively eliminated over $42 million of the $70 million initial term loan.”

As reported on Dec. 17, Vitamin Shoppe closed on $170 million of credit facilities that were used to help fund the acquisition by Franchise Group. The facilities consisted of a $70 million three-year senior secured term loan priced at Libor plus 900 basis points with a 2% Libor floor, and a $100 million three-year senior secured ABL revolver with pricing that can range from Libor plus 125 bps to 175 bps, based on excess availability, with a 0% Libor floor.

Vitamin Shoppe is a Secaucus, N.J.-based omni-channel, specialty retailer of nutritional products. Franchise Group is a Virginia Beach, Va.-based operator of franchised and franchisable businesses.

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