Merit Medical Systems,Inc. (NASDAQ:MMSI) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement.
On November15, 2017, Merit Medical Systems,Inc., a Utah corporation (“Merit”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Becton, Dickinson and Company, a New Jersey corporation (“BD”), to which Merit proposes to acquire various assets relating to (i)a tunneled home drainage catheter product line currently owned by C.R. Bard,Inc., a New Jersey corporation (“Bard”), and (ii)a soft tissue core needle biopsy product line currently owned by BD (collectively, the “Acquisition”). Merit proposes to acquire these assets in connection with the proposed merger between BD and Bard.
Completion of the proposed Acquisition is subject to customary closing conditions, including, among others, (i)the closing of the proposed merger between BD and Bard, (ii)obtaining antitrust approvals in the United States and certain other jurisdictions, (iii)subject to certain exceptions, the accuracy of the representations and warranties of the other party and (iv)material compliance by the other party with its obligations under the Purchase Agreement.
The Purchase Agreement contains customary representations and warranties that survive the closing of the Acquisition for eighteen (18) months, with certain exceptions, as well as customary indemnification provisions and covenants, including covenants relating to the conduct of business between the execution of the Purchase Agreement and the closing of the proposed Acquisition. The Purchase Agreement also contains certain termination rights for both Merit and BD, and provides that, in connection with a termination of the Purchase Agreement under specified circumstances, BD will reimburse certain transaction expenses of Merit up to $2,000,000.
At the closing of the Acquisition, Merit and BD intend to enter into various agreements to facilitate the transition of the acquired assets to Merit, including a Transition Services Agreement, Contract Manufacturing Agreement, Distribution Agreement and Patent and Know-How License Agreement.
The purchase price for assets acquired to the Purchase Agreement is $100 million, subject to adjustment for fluctuations in the value of transferred inventory. Merit intends to finance the purchase price at closing through borrowings which are currently available under its long-term credit facility.
The foregoing summary of the principal terms of the Purchase Agreement is not complete and is qualified in its entirety by the actual terms and conditions of the Purchase Agreement, a copy of which Merit intends to file in a future filing with the U.S. Securities& Exchange Commission (the “Commission”). The representations, warranties, and other terms contained in the Purchase Agreement were made solely for the purposes of such agreement and as of specified dates, were solely for the benefit of the parties to the Purchase Agreement, and may be subject to limitations agreed upon by the contracting parties. Those representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors 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 Merit, BD, Bard or any of their respective subsidiaries or affiliates. Accordingly, investors should not rely on the representations and warranties as characterizations of the actual state of facts, since (i)they were made only as of the date of the Purchase Agreement or prior, specified dates, (ii)in some cases they are subject to qualifications with respect to materiality, knowledge and/or other matters, and (iii)they may be modified in important part by the underlying exhibits and schedules.