Item 1.01 Entry into a Material Definitive Agreement.
On May 27, 2021, Medtech Products Inc. ("Purchaser"), a Delaware corporation and
a wholly-owned subsidiary of Prestige Consumer Healthcare Inc. (the "Company"),
entered into a definitive agreement (the "Purchase Agreement") with Akorn
Operating Company LLC, a Delaware limited liability company ("Akorn"). The
Purchase Agreement provides that, upon the terms and subject to the conditions
set forth therein, Purchaser will acquire a portfolio of over-the-counter
consumer brands from Akorn for $230 million in cash (the "Transaction").
The Company expects the Transaction to close in the second quarter of Fiscal
2021, subject to customary closing conditions, including clearance under the
Hart-Scott Rodino Antitrust Improvements Act of 1976.
Summary of the Terms of the Purchase Agreement
Upon the terms and subject to the conditions of the Purchase Agreement,
Purchaser has agreed to purchase from Akorn and its applicable affiliates all of
Akorn's and its applicable affiliates' right, title and interest in and to all
of the assets, properties and rights thereof that are primarily related to the
business referred to as "Akorn Consumer Health" involving the research,
development and sale of certain products specified in the Purchase Agreement
(the "Purchased Assets") and to assume certain liabilities related to the
Purchased Assets, for a purchase price of $230 million in cash, subject to
certain closing adjustments specified in the Purchase Agreement.
The closing of the Transaction is subject to the satisfaction or waiver of
certain customary conditions to closing including, among others, the absence of
any law, regulation, order, or injunction prohibiting the Transaction and the
expiration or termination of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. Each party's obligation to
consummate the Transaction is subject to certain other customary conditions,
including the accuracy of the representations and warranties of the other party
(generally subject to a material adverse effect standard) and compliance by the
other party with its obligations under the Purchase Agreement (generally subject
to a materiality standard).
The Purchase Agreement contains customary representations, warranties, and
covenants, as well as indemnification provisions that are subject to specified
limitations, including recourse to a representation and warranty insurance.
The Purchase Agreement also contains certain customary termination rights for
each of Purchaser and Akorn. The Purchase Agreement may be terminated by either
Purchaser or Akorn if the closing of the Transaction has not occurred prior to
October 31, 2021, subject to certain exceptions specified in the Purchase
Agreement. The Purchase Agreement may also be terminated by either Purchaser or
Akorn if the other party is in breach of the Purchase Agreement such that it has
not met its closing conditions, and has not or is not able to cure such breach.
The foregoing description of the terms of the Purchase Agreement does not
purport to be complete and is qualified in its entirety by reference to the full
text of the Purchase Agreement. The Company expects to file a copy of the
Purchase Agreement as an exhibit to its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2021.
The Purchase Agreement contains various representations and warranties made by
the parties solely for purposes of the Purchase Agreement and as of specific
dates set forth therein, which were the product of negotiations, and may be
subject to important qualifications and limitations included in confidential
disclosure schedules of the Purchase Agreement. Certain representations and
warranties in the Purchase Agreement were used for the purpose of allocating
risk between the parties, rather than establishing matters of fact. Furthermore,
the representations and warranties may be subject to standards of materiality
applicable to the parties that may be different from those applicable to the
Company's stockholders. Additionally, information concerning the subject matter
of such representations and warranties may change after the date of the Purchase
Agreement, which subsequent information may or may not be fully reflected in the
Company's public disclosures. Accordingly, such representations and warranties
in the Purchase Agreement may not constitute the actual state of facts about
Akorn, the Company, or Purchaser. Stockholders of the Company are not
third-party beneficiaries under the Purchase Agreement and should not rely on
the representations, warranties, and covenants or any descriptions thereof as
characterizations of the actual state of facts or condition of Akorn (or any of
its subsidiaries), the Company, or Purchaser or any of their respective
subsidiaries or affiliates.
Item 7.01 Regulation FD Disclosure.
On May 27, 2021, the Company issued a press release announcing the execution of
the Purchase Agreement. A copy of the press release is attached as Exhibit 99.1
to this Current Report on Form 8-K and is incorporated herein by reference.
The information in this Item 7.01 and the exhibit attached hereto is being
"furnished" and shall not be deemed "filed" for purposes of Section 18 of the
United States Securities Exchange Act of 1934, as amended (the "Exchange Act"),
or incorporated by reference into those filings of the Company that provide for
the incorporation of all reports and documents filed by the Company under the
Item 9.01 Financial Statements and Exhibits.
99.1 Press Release dated May 27, 2021 announcing the Company's agreement to
expand eye care offering with acquisition of TheraTears
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