Monster Beverage Corp. has been revealed as the winning bidder for Vital Pharmaceuticals, maker of Bang Energy, per court documents filed Wednesday in the U.S. District Bankruptcy Court in Florida. However, a pending U.S. Federal Trade Commission (FTC) investigation could derail the deal by tomorrow.
A notice of auction cancellation viewed by BevNET indicates that Blast Asset Acquisition LLC, an acquisition vehicle that is a subsidiary of Monster Beverage Corp., was the only bid received for “substantially all of the Debtors’ assets.” The two parties have entered into an Asset Purchase Agreement that values the aggregate consideration for “all or substantially all” of the assets at $362 million, inclusive of cash purchase price, a $25 million deposit and assumption of assumed liabilities.
An additional $10 million in cash is due to Blast within 30 days following its receipt of title to and ownership of a specific set of intellectual property, titled in the name of Entourage IP Holdings, LLC.
Vital will be required to apply the cash purchase price as dictated in the agreement:
* $16 million for encumbrances against owned real property
* $4 million to pay Excluded WARN Act Liabilities
* $4 million to pay all liabilities to prior or current employees of the seller
* The remaining cash will go to pay Debtors, including obligations to certain employees and distributors.
Yet the deal may not be long for this world, pending action by the FTC. As reported earlier this week, counsel for the debtors indicated that the oversight agency had launched an investigation into Monster’s bid that’s expected to take at least “a couple of months at a minimum.” Per the court filing, if the investigation isn’t closed or the HSR Act waiting period hasn’t been canceled by tomorrow, June 30, the agreement will automatically terminate – unless the buyer and seller agree on an extension.
A hearing considering approval of the sale is scheduled for July 13 at 1:30 p.m. EST.