| Item 1.01 | Entry into a Material Definitive Agreement |
On September 7, 2021, Universal Corporation (the “Company”) announced that it had entered into a Membership Interest Purchase Agreement, dated as of September 6, 2021 (the “Purchase Agreement”), with Shank’s Extracts, Inc. (“Shank’s”), the holder of all of the capital stock of Shank’s (“Stockholder”), and Rolling Rock Transit Company, pursuant to which the Company will, subject to the terms and conditions set forth therein, acquire 100% of the capital stock of Shank’s for approximately $100 million in cash (the “Acquisition”). In connection with the Acquisition, the Company entered into an Agreement for Purchase and Sale of Real Property with Shank’s Properties, an affiliate of Shank’s, pursuant to which the Company will acquire the real property assets related to the Shank’s business from Shank’s Properties for approximately $13.325 million in cash. At the closing of the Acquisition, Shank’s will become a wholly-owned direct or indirect subsidiary of the Company.
The parties to the Purchase Agreement have each made customary representations, warranties and covenants. The parties have agreed to cooperate with each other and use commercially reasonable efforts to make all filings and obtain all consents, approvals and authorizations of all governmental entities to the extent required by law in connection with the execution, delivery and performance of the Purchase Agreement and the consummation of the transactions contemplated thereby, subject to specified limitations.
Consummation of the Acquisition is expected by the end of calendar year-end 2021, subject to certain conditions, including receipt of required regulatory approvals, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and other customary closing conditions and deliverables.
The Purchase Agreement may be terminated by either party under certain circumstances, including if the sale is not consummated by December 31, 2021.
The Company expects to fund the transaction with cash on hand and borrowings under its committed revolving credit facility.
The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the Purchase Agreement, which is filed as Exhibit 2.1 hereto, and is incorporated into this report by reference.
The above description of the Purchase Agreement has been included to provide investors with information regarding its terms. The Purchase Agreement contains representations and warranties made by and to the parties thereto as of specific dates. The statements embodied in those representations and warranties were made for the purpose of allocating risk between the parties rather than establishing matters as facts and are subject to qualifications and limitations agreed upon by the parties in connection with negotiating the terms of the Purchase Agreement. In addition, certain representations and warranties were made as of a specified date and may be subject to a contractual standard of materiality different from those generally applicable to investors.
| Item 7.01 | Regulation FD Disclosure |
On September 7, 2021, the Company issued a press release regarding the Acquisition. A copy of this release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
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