Business Context and Reporting Period
On December 13, 2021, Haymaker Acquisition Corp. III, a special purpose acquisition company, entered into a Business Combination Agreement with BioTe Holdings, LLC and related parties. The proposed transaction would combine Haymaker with BioTE and rename the combined company biote Corp. This Form 8-K reports the transaction announcement; it does not provide a historical income statement or comparable reporting-period financial results for BioTE.
Transaction Economics and Key Financial Terms
- BioTE equity value is specified as $555 million, subject to transaction adjustments.
- Assuming no redemptions by Haymaker’s public stockholders and excluding earnout securities and warrants, the post-closing company is expected to own approximately 52% of BioTE’s units and control BioTE as its sole manager.
- Up to approximately $200 million of cash consideration may be paid to the Gary S. Donovitz 2012 Irrevocable Trust; the specified transaction structure includes $125 million of stated cash payments to the selling member, before additional allocations described in the agreement.
- Closing cash is prioritized for transaction expenses, payments to BioTE, cash consideration to the selling member, and then additional amounts to BioTE.
- BioTE’s subsidiary entered into a debt commitment letter for a $50 million senior secured revolving facility and a $125 million senior secured term loan.
- BioTE must receive at least $125 million of Closing Date Cash, including qualifying debt-financing proceeds, for its obligation to close to apply.
- The Company must have at least $5,000,001 of net tangible assets after redemptions at closing.
- The Tax Receivable Agreement would require the Company to pay members 85% of specified realized tax savings.
- Members may generally exchange retained BioTE units, together with corresponding Class V voting shares, for Class A common stock or, in certain circumstances, cash beginning six months after closing.
Material Changes and Capital Structure
- The transaction would create an “Up-C” structure, with substantially all operating assets held by BioTE and its subsidiaries.
- Class V voting stock would carry voting rights but no dividend or distribution rights and would be issued to holders retaining BioTE units.
- All outstanding Class B common stock would convert into an aggregate of 7,937,500 shares of Class A common stock, subject to the transaction documents.
- 10 million member earnout units and corresponding voting shares, plus 1,587,500 sponsor earnout shares and corresponding units, would be subject to vesting and potential forfeiture.
- Earnout tranches vest at Class A common stock VWAP thresholds of $12.50, $15.00, and $17.50, each measured over 20 trading days in a 30-trading-day period before the fifth anniversary of closing, subject to the agreement.
- Up to 793,750 shares of the Sponsor’s Class B common stock may be forfeited based on cash remaining in Haymaker’s trust account after redemptions and any pre-closing financing.
- The Sponsor agreed to support the transaction, waive applicable anti-dilution rights, and accept specified transfer restrictions.
Guidance, Outlook, Risks, and Contingencies
- No reported revenue, profit, cash flow, margin, historical debt, or liquidity results are provided in the filing text.
- Closing remains subject to stockholder approval, applicable antitrust clearance, absence of a material adverse effect, compliance with closing obligations, accuracy of representations and warranties, minimum net tangible assets, and the minimum Closing Date Cash condition.
- The transaction may be terminated by mutual consent, by either party if consummation becomes illegal, if closing does not occur by the applicable outside date, or for specified uncured breaches.
- The debt financing is subject to customary conditions, and failure to obtain the Truist facilities could prevent satisfaction of the minimum cash condition.
- Key disclosed risks include failure or delay of the transaction, redemptions, inability to maintain exchange listing, transaction costs, failure to realize projected benefits, regulatory and legal proceedings, COVID-19 and industry downturns, competition, supply chain issues, cybersecurity and privacy, healthcare fraud and abuse, HIPAA compliance, pharmacy-compounding scrutiny, litigation, capital needs, physician and employee relationships, and reliance on forecasts.
- The filing states that the transaction has not been supported by a third-party valuation and that forward-looking statements are subject to substantial uncertainty.
Important Facts for Investors to Verify
- Whether Haymaker stockholders approve the transaction and the level of public-stockholder redemptions.
- Whether the committed $125 million term loan and $50 million revolving facility close on acceptable terms.
- Whether the $125 million minimum Closing Date Cash condition and $5,000,001 net tangible asset condition are satisfied.
- The final number of BioTE units, Class A shares, Class V shares, warrants, earnout securities, and sponsor securities outstanding at closing.
- The final cash paid to the selling member and the amount retained by BioTE after transaction expenses and other closing allocations.
- The detailed terms of the Business Combination Agreement, Tax Receivable Agreement, BioTE operating agreement, Sponsor Letter Agreement, and Investor Rights Agreement when filed.
- BioTE’s historical and projected revenue, profitability, cash flow, debt, liquidity, regulatory exposure, and operating assumptions, which are not clearly provided in this Form 8-K text.