Business Context and Reporting Period
Company: LeMaitre Vascular, Inc.
Filing Type: Form 8-K (Current Report)
Date: November 10, 2016
Event: Entry into a Material Definitive Agreement and Completion of Acquisition of Assets.
On November 10, 2016, LeMaitre Vascular, Inc. consummated the acquisition of substantially all assets of Restore Flow Allografts, LLC ("RFA"). RFA specializes in human tissue preservation services, specifically the processing and cryopreservation of peripheral vascular veins and arteries.
Key Financial Metrics and Transaction Terms
The acquisition was executed for cash and contingent consideration. The filing does not provide the Company's consolidated revenue, profit, or cash flow metrics for the period, as this is a transaction-specific report.
| Component | Details |
|---|---|
| Cash Consideration (Upfront) | $12,000,000 paid on the Closing Date. |
| Cash Consideration (Deferred) | $2,000,000 payable eighteen months following the Closing Date. |
| Contingent Consideration (Year 1) | 0.5x amount by which net sales of acquired products exceed $6.0 million; capped at $2,000,000. |
| Contingent Consideration (Year 2) | 0.5x amount by which net sales of acquired products exceed $9.0 million; capped at $2,000,000. |
| Assets Acquired | Tangible assets, intellectual property, registrations/approvals, inventory, data records, and goodwill. |
Material Changes and Operational Impact
- Acquisition Significance: The acquisition is not considered significant above the 20% level; therefore, financial statements of the acquired business are not required to be filed.
- Non-Compete Agreement: RFA and certain principals agreed to a five-year non-compete and non-solicitation covenant regarding the sold business and former employees now employed by LeMaitre.
- Operational Transition: The Company anticipates transitioning operations from RFA's Fox River Grove, IL facility to LeMaitre's Burlington, MA headquarters in 2018.
Guidance, Risks, and Contingencies
Indemnification: Both parties are obligated to indemnify each other for breaches of representations, warranties, covenants, and certain liabilities or third-party claims.
Risks and Forward-Looking Statements: The filing includes standard disclaimers regarding forward-looking statements. Risks include the potential failure to realize anticipated benefits from strategic activities. The Company undertakes no obligation to update these statements.
Exhibits: The full Asset Purchase Agreement will be filed with the Annual Report on Form 10-K for the fiscal year ending December 31, 2016. A press release is included as Exhibit 99.1.
Investor Verification Checklist
- Verify the final purchase price once contingent consideration thresholds are met or missed in Years 1 and 2.
- Monitor the 2018 operational transition from the Illinois facility to Massachusetts for potential integration costs or disruptions.
- Review the full Asset Purchase Agreement in the upcoming Form 10-K for detailed representations, warranties, and specific liability caps.
- Assess the impact of the $14 million immediate and deferred cash outflow on the Company's liquidity position in subsequent quarterly reports.