Blyth (BTH) Ticks Higher After Announcing Increased Ownership in ViSalus
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Blyth, Inc. (NYSE: BTH) announced that it and the other members of ViSalus have reached an agreement whereby Blyth increased its ownership in ViSalus to more than 80% for a payment of $57.4 million to the other members of ViSalus. In addition, the other members of ViSalus have agreed to exchange their membership interests for capital stock of ViSalus, Inc. which will be redeemable in December 2017 for a total redemption price of $147.5 million. ViSalus will also redeem in January 2013 all of the outstanding interests under its Equity Incentive Plan for $25.3 million, which will be funded by Blyth.
The new agreement between Blyth and the other members of ViSalus provides for a series of transactions, detailed below, that achieve the mutually-shared objectives of providing ViSalus' Founders and its management team the opportunity to participate in ViSalus' future results through their ongoing ownership and participation in a new management incentive plan. In addition, the new agreement should improve Blyth's long-term liquidity by providing for a redemption of the ViSalus stock it does not own in December 2017. All of the members of ViSalus agreed to sell their interests in ViSalus ratably, allowing Blyth to achieve an ownership position in excess of 80%.
Commenting on the execution of this definitive agreement between Blyth and the other members of ViSalus, including all of the Founders, Robert B. Goergen, Chairman and Chief Executive Officer of Blyth said, "We are extremely pleased to have crafted an agreement that meets our objectives of providing the ViSalus Founders and other members of their management team with an equity participation in ViSalus' future results. Moreover, as a group, the ViSalus Founders continue to be significant Blyth shareholders, strengthening further this alignment. I look forward to working with Ryan and his management team to grow the ViSalus business together, making ViSalus a worldwide household brand synonymous with 'healthy lifestyle.'"
The new agreement between Blyth and the other members of ViSalus provides for the following transactions. The transactions between Blyth and ViSalus involve related parties as described below.
Blyth purchased 7.6% of the membership interests of ViSalus Holdings, LLC from the other members for $57.4 million, which increased Blyth's membership interest in ViSalus Holdings, LLC to 80.4%.
Blyth and the other members in ViSalus Holdings, LLC exchanged their membership interests in ViSalus Holdings, LLC for common stock of ViSalus, Inc., a Nevada corporation that was a wholly-owned subsidiary of ViSalus Holdings, LLC.
Blyth exchanged its membership interests for shares of Class A and Class B Common Stock of ViSalus, Inc. that together represent 80.4% of the capital stock of ViSalus, Inc. on a fully converted basis. Each share of Class A Common Stock entitles Blyth to one vote and each share of Class B Common Stock entitles Blyth to 10 votes on all matters submitted to ViSalus' stockholders.
Ryan Blair, Blake Mallen and Nick Sarnicola (ViSalus' Founders) exchanged their membership interests in ViSalus Holdings, LLC for shares of Series B Preferred Stock of ViSalus, Inc., which together represent 13.7% of the capital stock of ViSalus, Inc. on a fully converted basis. Each share of Series B Preferred Stock entitles its holder to 10 votes on all matters submitted to ViSalus' stockholders.
Robert B. Goergen, Robert B. Goergen, Jr., Todd A. Goergen (all three of whom are related parties of Blyth) and the other holders of preferred membership interests in ViSalus Holdings, LLC exchanged their preferred membership interests in ViSalus Holdings, LLC for shares of Series B Preferred Stock of ViSalus, Inc., which together represent 2.9% of the capital stock of ViSalus, Inc. on a fully converted basis.
The remaining holders of common membership interests of ViSalus Holdings, LLC exchanged those interests for shares of Series A Preferred Stock of ViSalus, Inc., which together represent 3.0% of the capital stock of ViSalus, Inc. on a fully converted basis. Each share of Series A Preferred Stock entitles its holder to one vote on all matters submitted to ViSalus' stockholders.
Blyth and ViSalus have agreed to redeem all of the Series A and Series B Preferred Stock on December 31, 2017 for a total redemption price of $147.5 million, provided that the Preferred Stock shall not have converted earlier into common stock of ViSalus, Inc. as described below.
In the event that ViSalus, Inc. completes an initial public offering that implies a valuation of at least $800 million or that has been approved by a majority of the voting power of the Preferred Stock prior to December 31, 2017, the Series A and Series B Preferred Stock will convert into Class A and Class B Common Stock, respectively, in an amount equal to their ownership percentage. The Class A Common Stock will entitle its holders to one vote and the Class B Common Stock will entitle its holders to ten votes on all matters submitted to stockholders. The implied valuation set forth in the first sentence is an aspirational goal and should not be considered the valuation of ViSalus at the date hereof or to predict ViSalus' valuation at any time in the future.
ViSalus will redeem all of the outstanding interests under its Equity Incentive Plan for $25.3 million, which will terminate the EIP. Blyth will provide the funds to ViSalus for this redemption.
ViSalus will adopt a dividend policy pursuant to which it intends to pay regular cash dividends to its stockholders, subject to the prior approval by its and Blyth's boards of directors. Based on the current ownership structure, Blyth will receive 80.4% of such dividends when and as declared and paid by ViSalus.
In addition, ViSalus is entering into new five-year employment agreements with Ryan Blair, ViSalus' Chief Executive Officer, and Blake Mallen, its Chief Marketing Officer. ViSalus also intends to create a management incentive plan and to issue stock options and restricted stock units that will vest over an eight-year period to Mr. Blair, Mr. Mallen and ViSalus' third Founder, Nick Sarnicola, Global Ambassador. ViSalus also intends to issue stock options and restricted stock units to its senior management team that will vest over a three-year period.
The new agreement between Blyth and the other members of ViSalus provides for a series of transactions, detailed below, that achieve the mutually-shared objectives of providing ViSalus' Founders and its management team the opportunity to participate in ViSalus' future results through their ongoing ownership and participation in a new management incentive plan. In addition, the new agreement should improve Blyth's long-term liquidity by providing for a redemption of the ViSalus stock it does not own in December 2017. All of the members of ViSalus agreed to sell their interests in ViSalus ratably, allowing Blyth to achieve an ownership position in excess of 80%.
Commenting on the execution of this definitive agreement between Blyth and the other members of ViSalus, including all of the Founders, Robert B. Goergen, Chairman and Chief Executive Officer of Blyth said, "We are extremely pleased to have crafted an agreement that meets our objectives of providing the ViSalus Founders and other members of their management team with an equity participation in ViSalus' future results. Moreover, as a group, the ViSalus Founders continue to be significant Blyth shareholders, strengthening further this alignment. I look forward to working with Ryan and his management team to grow the ViSalus business together, making ViSalus a worldwide household brand synonymous with 'healthy lifestyle.'"
The new agreement between Blyth and the other members of ViSalus provides for the following transactions. The transactions between Blyth and ViSalus involve related parties as described below.
Blyth purchased 7.6% of the membership interests of ViSalus Holdings, LLC from the other members for $57.4 million, which increased Blyth's membership interest in ViSalus Holdings, LLC to 80.4%.
Blyth and the other members in ViSalus Holdings, LLC exchanged their membership interests in ViSalus Holdings, LLC for common stock of ViSalus, Inc., a Nevada corporation that was a wholly-owned subsidiary of ViSalus Holdings, LLC.
Blyth exchanged its membership interests for shares of Class A and Class B Common Stock of ViSalus, Inc. that together represent 80.4% of the capital stock of ViSalus, Inc. on a fully converted basis. Each share of Class A Common Stock entitles Blyth to one vote and each share of Class B Common Stock entitles Blyth to 10 votes on all matters submitted to ViSalus' stockholders.
Ryan Blair, Blake Mallen and Nick Sarnicola (ViSalus' Founders) exchanged their membership interests in ViSalus Holdings, LLC for shares of Series B Preferred Stock of ViSalus, Inc., which together represent 13.7% of the capital stock of ViSalus, Inc. on a fully converted basis. Each share of Series B Preferred Stock entitles its holder to 10 votes on all matters submitted to ViSalus' stockholders.
Robert B. Goergen, Robert B. Goergen, Jr., Todd A. Goergen (all three of whom are related parties of Blyth) and the other holders of preferred membership interests in ViSalus Holdings, LLC exchanged their preferred membership interests in ViSalus Holdings, LLC for shares of Series B Preferred Stock of ViSalus, Inc., which together represent 2.9% of the capital stock of ViSalus, Inc. on a fully converted basis.
The remaining holders of common membership interests of ViSalus Holdings, LLC exchanged those interests for shares of Series A Preferred Stock of ViSalus, Inc., which together represent 3.0% of the capital stock of ViSalus, Inc. on a fully converted basis. Each share of Series A Preferred Stock entitles its holder to one vote on all matters submitted to ViSalus' stockholders.
Blyth and ViSalus have agreed to redeem all of the Series A and Series B Preferred Stock on December 31, 2017 for a total redemption price of $147.5 million, provided that the Preferred Stock shall not have converted earlier into common stock of ViSalus, Inc. as described below.
In the event that ViSalus, Inc. completes an initial public offering that implies a valuation of at least $800 million or that has been approved by a majority of the voting power of the Preferred Stock prior to December 31, 2017, the Series A and Series B Preferred Stock will convert into Class A and Class B Common Stock, respectively, in an amount equal to their ownership percentage. The Class A Common Stock will entitle its holders to one vote and the Class B Common Stock will entitle its holders to ten votes on all matters submitted to stockholders. The implied valuation set forth in the first sentence is an aspirational goal and should not be considered the valuation of ViSalus at the date hereof or to predict ViSalus' valuation at any time in the future.
ViSalus will redeem all of the outstanding interests under its Equity Incentive Plan for $25.3 million, which will terminate the EIP. Blyth will provide the funds to ViSalus for this redemption.
ViSalus will adopt a dividend policy pursuant to which it intends to pay regular cash dividends to its stockholders, subject to the prior approval by its and Blyth's boards of directors. Based on the current ownership structure, Blyth will receive 80.4% of such dividends when and as declared and paid by ViSalus.
In addition, ViSalus is entering into new five-year employment agreements with Ryan Blair, ViSalus' Chief Executive Officer, and Blake Mallen, its Chief Marketing Officer. ViSalus also intends to create a management incentive plan and to issue stock options and restricted stock units that will vest over an eight-year period to Mr. Blair, Mr. Mallen and ViSalus' third Founder, Nick Sarnicola, Global Ambassador. ViSalus also intends to issue stock options and restricted stock units to its senior management team that will vest over a three-year period.
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