Verticalnet cofounder to head diet firm Mike Hagan will run weight-loss firm Nutri/System - and steer his old firm through the sale process.

Mike Hagan, who cofounded the Internet business-to-business archetype Verticalnet Inc. in 1995, is moving to a company aimed at helping the horizontally challenged.

Hagan has been appointed chairman and chief executive officer of weight-loss firm Nutri/System Inc., of Horsham, the company said yesterday.

HJM Holdings L.L.C., an investment group led by Hagan and backed by Safeguard Scientifics Inc. founder Warren "Pete" Musser and advertising impresario Brian Tierney of Tierney Communications, among others, bought 10.5 million shares of Nutri/System stock from three stockholders in private transactions, the company said.

Combined with 4.8 million shares bought by NewSpring Ventures L.P., a venture-capital fund led by managing partner Mike DiPiano, HJM and NewSpring control 58 percent of publicly traded Nutri/System's shares.

Nutri/System offers online and telephone weight-loss counseling, and sells foods designed for dieters.

Hagan did not return a telephone call seeking comment. Nutri/System staff said he was in meetings with employees.

"Nutri/System was particularly attractive to me because it is a company with a battle-tested, bricks-and-mortar-value proposition - profitable company, 30-year-old brand, legions of loyal repeat customers, high-quality product - in which revenue growth and customer acquisition is being driven mostly by the Internet," Hagan said in a written statement.

Hagan takes the helm at Nutri/System after watching Verticalnet reach stratospheric heights in the heyday of the tech boom, only to plummet perilously with the dot-com bust.

Verticalnet, of Malvern, was valued at $738 million on its first day of trading on the Nasdaq in February 1999.

Last month, it told the Securities and Exchange Commission that it had enough money left to remain in business only through March 31 and was contemplating a sale, bankruptcy filing or liquidation.

The company, which has tried to evolve from providing Internet-based marketplaces to providing inventory software, told the SEC it had hired investment-banking firm US Bankcorp Piper Jaffray to explore a sale.

One of Hagan's remaining duties as Verticalnet chairman is to navigate the company through the sale process.

After weathering a tough 2001, Nutri/System appears to be expanding its margins right along with Americans' waistlines. The federal Centers for Disease Control and Prevention estimates that 64 percent of U.S. adults are overweight or obese and that the number appears to be trending upward.

Those pounds have been good news for Nutri/System. Net income for the first nine months of 2002 was $3.4 million, compared with $1.2 million for the same period in 2001.

Contact staff writer Akweli Parker at 215-854-5986 or aparker@phillynews.com.