AEROVIRONMENT,INC. (NASDAQ:AVAV) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
As previously reported by AeroVironment,Inc. (the “Company”) in its Current Report on Form8-K, filed with the Securities and Exchange Commission on June4, 2018 (the “Form8-K”), the Company entered into an Asset Purchase Agreement, dated June1, 2018 (the “Purchase Agreement”), with Webasto Charging Systems,Inc. (the “Purchaser”), to which the Company agreed to sell, and the Purchaser agreed to acquire, the Company’s efficient energy systems business, which designs, manufactures, and sells energy products and solutions, including, but not limited to, products and solutions related to electric vehicle charging, industrial charging, power management, and power cycling and test systems (the “EES Business”).
On June29, 2018, the Company and Purchaser entered into a Side Letter Agreement related to the Purchase Agreement (the “Letter Agreement”), to which the parties agreed that the purchase price to be paid by the Purchaser to the Company at the closing of the transactions contemplated by the Purchase Agreement would be reduced by $6.5 million (the “Holdback Amount”), until certain specified approvals and consents from certain customers of the EES Business are obtained by the Company and provided to the Purchaser. The Purchaser has agreed to pay the Holdback Amount to the Company within three business days of the Purchaser’s receipt of such specified approvals and consents from the Company. The Company also agreed to indemnify the Purchaser, up to the amount of the Holdback Amount, for losses and damages arising from or related to liabilities relating to such specified approvals and consents and the Company’s breach or non-fulfillment of any covenant or agreement contained in the Letter Agreement.
The foregoing description of the Letter Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the complete text of such agreement. The Company will file the Letter Agreement as an exhibit to its Quarterly Report on Form10-Q for the quarter ending July29, 2018.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On June29, 2018, the Company closed its disposition of the EES Business to the Purchase Agreement. In connection with the acquisition of the EES Business, the Purchaser paid the Company $32.0 million in cash at closing, which amount excludes the Holdback Amount and remains subject to certain post-closing adjustments, and the Purchaser assumed certain liabilities.
The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the complete text of such agreement. The Company will file the Purchase Agreement as an exhibit to its Quarterly Report on Form10-Q for the quarter ending July29, 2018.
Item 2.05. Costs Associated with Exit or Disposal Activities
In connection with the matters described under Item 2.01, which description is incorporated herein by reference, and as previously reported by the Company in the Form8-K, the Company estimates certain material costs associated with management’s plan to exit the Company’s EES Business segment including, but not limited to, legal and other transaction advisory fees, and other transaction related costs. As a result of work performed by the Company and its advisors since the date of the Form8-K, the Company now expects that the known costs associated with the sale of the EES Business will be approximately $1.8 million in aggregate (including previously disclosed known costs). However, certain other costs associated with selling or exiting the EES Business are not currently reasonably estimable.
All of the above charges, the nature of such charges and the effect of such charges are estimates and are subject to change.
Item 7.01. Regulation FD Disclosure.
On July3, 2018, the Company issued a press release announcing the consummation of its disposition of the EES Business. A copy of the press release is attached as Exhibit99.1 to this Current Report on Form8-K and incorporated by reference herein.