Item 2.01 Completion of Acquisition or Disposition of Assets.
As previously disclosed, on August 28, 2019, Castle Brands Inc., a Florida corporation (the Company), Austin, Nichols & Co., Inc., a Delaware corporation and affiliate of Pernod Ricard S.A. (Parent), and Parents newly-formed subsidiary, Rook Merger Sub, Inc., a Florida corporation (Merger Sub), entered into an Agreement and Plan of Merger (the Merger Agreement) pursuant to which Merger Sub commenced a tender offer (the Offer) on September 11, 2019 to purchase all of the issued and outstanding shares of common stock, par value $0.01 per share (the Shares), of the Company at a purchase price of $1.27 per Share, in cash, net of applicable withholding taxes and without interest (the Offer Price), upon the terms and subject to the conditions set forth in the offer to purchase (the Offer to Purchase) and the related letter of transmittal, which were attached as exhibits to the Tender Offer Statement on Schedule TO, filed by Parent and Merger Sub with the U.S. Securities and Exchange Commission (the SEC) on September 11, 2019.
The Offer expired at 12:00 midnight, New York City time, on Tuesday, October 8, 2019, at which time, based on information from Continental Stock Transfer & Trust Company, the depositary and paying agent for the Offer, the Companys shareholders have validly tendered and not withdrawn 150,335,952 Shares (excluding 2,417,028 Shares tendered pursuant to the guaranteed delivery procedures), which represented approximately 85.49% of the outstanding Shares on a fully diluted basis, and 89.52% of the then outstanding Shares on a non-fully diluted basis, and therefore satisfied the minimum condition of the Offer (which required the tender of that number of Shares which, when added to the Shares owned by Parent and its affiliates, would represent more than 50% of the Shares then outstanding determined on a fully-diluted basis). As a result of the satisfaction of the minimum condition and each of the other conditions to the Offer, Merger Sub accepted for payment all validly tendered Shares.
On October 9, 2019, Merger Sub completed the acquisition of the Company through a short-form merger (the Merger) in accordance with Section 607.1104 of the Florida Business Corporation Act (the FBCA), without the need for a meeting of the Companys shareholders. At the effective time of the Merger, each Share then outstanding (other than any Shares in respect of which appraisal rights are validly exercised under the FBCA and any Shares owned by the Company, Parent or any of their subsidiaries (including Merger Sub)) was, by virtue of the Merger and without any action on the part of the holders of the Shares, converted into the right to receive the Offer Price. The net transaction value of the Offer and the Merger was approximately $295 million, which includes the aggregate consideration to cash out employee stock options and other stock-based compensation of the Company, amounts that will become payable under the Companys existing credit facilities, certain other payment obligations of the Company and fees and expenses related to the foregoing. On October 9, 2019, the Company and Parent issued a joint press release announcing the completion of the Offer and the Merger, a copy of which is attached to the Companys Schedule 14D-9/A, filed with the SEC on October 9, 2019, as Exhibit (a)(5), and is incorporated herein by reference.
As a result of the completion of the Offer, a change in control of the Company occurred (the Change in Control) and, as a result of the completion of the Merger, the Company has become a direct wholly-owned subsidiary of Parent.
References to, and descriptions of, the Merger Agreement as set forth herein are not intended to be complete and are qualified in their entirety by reference to the Merger Agreement, a copy of which was filed by the Company as Exhibit 2.1 to the Form 8-K dated August 29, 2019, and which is incorporated herein by reference.
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