Rite Aid Corporation (NYSE:RAD) Files An 8-K Other EventsItem 8.01. Other Events.
As previously disclosed, on September18, 2017, Rite Aid Corporation, a Delaware corporation (the “Company”) entered into the Amended and Restated Asset Purchase Agreement (the “Asset Purchase Agreement”) with Walgreens Boots Alliance,Inc., a Delaware corporation (“WBA”), and Walgreen Co., an Illinois corporation and a wholly owned subsidiary of WBA (“Buyer”). Under the Asset Purchase Agreement, Buyer has purchased or will purchase a total of 1,932 stores, three distribution centers and related inventory from the Company (the “Disposal Group”) for an all-cash purchase price of $4.375 billion on a cash-free, debt-free basis (the “Sale”). As of March27, 2018, all 1,932 stores and related inventory have been transferred to Buyer. The transfer of the three distribution centers and related inventory is expected to begin after September 1, 2018. The majority of closing conditions to the Sale have been satisfied, and the subsequent transfer of the Company’s distribution centers and related assets remain subject to minimal customary closing conditions applicable only to the distribution centers being transferred at such distribution center closing, as specified in the Asset Purchase Agreement. As a result of the Sale, the Company will account for the Disposal Group as a discontinued operation.
The Company is filing this Current Report on Form8-K to revise and recast its historical consolidated financial statements and certain other information included in its Annual Report on Form10-K for the fiscal year ended March4, 2017 (the “2017 Form10-K”) to account for the Disposal Group as a discontinued operation. The recasted financial results for the years ended March4, 2017, February27, 2016 and February28, 2015 are consistent with the presentation of discontinued operations included in the Company’sQuarterly Report on Form10-Q for the quarter ended December2, 2017, filed with the Securities and Exchange Commission (the “SEC”) on January11, 2018, and with rulesof the SEC to reflect accounting changes, such as discontinued operations.
The information included in Exhibit99.1 to this Current Report on Form8-K is presented solely in connection with the reporting changes described above. Except as disclosed in PartI: Subsequent Event in Exhibit99.1 to this Current Report, this Current Report does not reflect events occurring after the Company filed its 2017 Form10-K, including the pending merger between the Company and Albertsons Companies,Inc., and does not modify or update the disclosures therein in any way, in each case other than to reflect the presentation of the Disposal Group as a discontinued operation as described above. Therefore, Exhibit99.1 to this Current Report on Form8-K should be read in conjunction with our other filings made with the SEC, including, and subsequent to the date of, the 2017 Form10-K.
The Company has revised the following portions of the 2017 Form10-K to reflect the Disposal Group as a discontinued operation:
· Item 6. Selected Financial Data — Continuing Operations
· Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Continuing Operations
· Item 8. Financial Statements and Supplementary Data
The revised portions of the 2017 Form10-K described above are attached as Exhibit99.1 hereto and incorporated herein by reference. All other information in the 2017 Form10-K remains unchanged. References to the exhibits attached hereto to the 2017 Form10-K or parts thereof refer to the 2017 Form10-K, except to the extent portions of such 2017 Form10-K have been recast in Exhibit99.1 to this Current Report on Form8-K, in which case they refer to the applicable revised portion in Exhibit99.1 to this Current Report on Form8-K.
The foregoing description of the Asset Purchase Agreement and the transactions contemplated thereby is not complete and is subject to, and qualified in its entirety by, the full text of the Asset Purchase Agreement, a copy of which was filed as Exhibit2.1 to the Company’s Current Report on Form8-K filed with the SEC on September19, 2017, and which is incorporated herein by reference.
Statements in this report that are not historical, are forward-looking statements made to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements regarding the expected timing of the distribution center closing of the Sale; the ability of the Company and WBA to complete the distribution center closing and related transactions considering the various closing conditions applicable to the distribution centers and related assets being transferred at such distribution center closing; the outcome of legal and regulatory matters in connection with the Sale; the expected benefits of the transactions such as improved operations, growth potential, market profile and financial strength; the competitive ability and position of the Company following completion of the proposed transactions; the ability of the Company to implement new business strategies following the completion of the proposed transactions; the ability of the Company to repay its debt using the proceeds from the proposed transactions with WBA and any assumptions underlying any of the foregoing. Words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “predict,” “project,” “should,” and “will” and variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and involve risks, assumptions and uncertainties, including, but not limited to, our high level of indebtedness and our ability to make interest and principal payments on our debt and satisfy the other covenants contained in our debt agreements; general economic, industry, market, competitive, regulatory and political conditions; our ability to improve the operating performance of our stores in accordance with our long term strategy; the impact of private and public third-party payers continued reduction in prescription drug reimbursements and efforts to encourage mail order; our ability to manage expenses and our investments in working capital; outcomes of legal and regulatory matters; changes in legislation or regulations, including healthcare reform; our ability to achieve the benefits of our efforts to reduce the costs of our generic and other drugs; risks related to the inability to complete the remaining distribution center closing of the Sale and recognize the corresponding expected gain due to the failure to satisfy the minimal remaining conditions applicable only to the distribution centers being transferred at the distribution center closing and other risks related to obtaining the requisite consents to the remaining distribution center closing of the Sale; the risk that there may be a material adverse change of the Company, or the business of the Company may suffer as a result of uncertainty surrounding the Sale; risks related to the ability to realize the anticipated benefits of the proposed transactions with WBA; risks associated with the financing of the proposed transaction; disruption from the proposed transactions making it more difficult to maintain business and operational relationships; the effect of the pending Sale on the Company’s business relationships (including, without limitation, customers and suppliers), operating results and business generally; risks related to diverting management’s or employees’ attention from ongoing business operations; the risk that the Company’s stock price may decline significantly if the distribution center closing is not completed; significant transaction costs; unknown liabilities; the risk of litigation and/or regulatory actions related to the Sale; potential changes to our strategy in the event the remaining proposed transactions do not close, which may include delaying or reducing capital or other expenditures, selling assets or other operations, attempting to restructure or refinance our debt, or seeking additional capital, and other business effects. These and other risks, assumptions and uncertainties are more fully described in Item 1A (Risk Factors) of our most recent Annual Report on Form10-K and in other documents that we file or furnish with the SEC, which you are encouraged to read. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Accordingly, you are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. The Company expressly disclaims any current intention to update publicly any forward-looking statement after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise.
RITE AID CORP ExhibitEX-23.1 2 a18-9114_1ex23d1.htm EX-23.1 Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in Registration Statements Nos. 333-61734,…To view the full exhibit click here About Rite Aid Corporation (NYSE:RAD) Rite Aid Corporation is a retail drugstore chain. The Company’s segments include Retail Pharmacy and Pharmacy Services. The Company operates under The Rite Aid name. It operates approximately 4,560 stores in over 30 states across the country and in the District of Columbia. The Company’s Retail Pharmacy segment consists of Rite Aid stores, RediClinic and Health Dialog. It sells brand and generic prescription drugs, as well as an assortment of front-end products, including health and beauty aids, personal care products, seasonal merchandise, and a private brand product line. Its front-end products include over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, food and beverages, greeting cards, seasonal merchandise and numerous other everyday and convenience products. The Company’s Pharmacy Services segment consists of EnvisionRx, which provides a range of pharmacy benefit services.