Item 8.01. Other Events.
As previously disclosed, on September 18, 2017, Rite Aid Corporation, a Delaware corporation (the Company) entered into the Amended and Restated Asset Purchase Agreement (the Asset Purchase Agreement) with Walgreens Boots Alliance, Inc., a Delaware corporation (WBA), and Walgreen Co., an Illinois corporation and a wholly owned subsidiary of WBA (Buyer). Under the Asset Purchase Agreement, Buyer has purchased or will purchase a total of 1,932 stores, three distribution centers and related inventory from the Company (the Disposal Group) for an all-cash purchase price of $4.375 billion on a cash-free, debt-free basis (the Sale). As of March 27, 2018, all 1,932 stores and related inventory have been transferred to Buyer. The transfer of the three distribution centers and related inventory is expected to begin after September 1, 2018. The majority of closing conditions to the Sale have been satisfied, and the subsequent transfer of the Companys distribution centers and related assets remain subject to minimal customary closing conditions applicable only to the distribution centers being transferred at such distribution center closing, as specified in the Asset Purchase Agreement. As a result of the Sale, the Company will account for the Disposal Group as a discontinued operation.
The Company is filing this Current Report on Form 8-K to revise and recast its historical consolidated financial statements and certain other information included in its Annual Report on Form 10-K for the fiscal year ended March 4, 2017 (the 2017 Form 10-K) to account for the Disposal Group as a discontinued operation. The recasted financial results for the years ended March 4, 2017, February 27, 2016 and February 28, 2015 are consistent with the presentation of discontinued operations included in the Companys Quarterly Report on Form 10-Q for the quarter ended December 2, 2017, filed with the Securities and Exchange Commission (the SEC) on January 11, 2018, and with rules of the SEC to reflect accounting changes, such as discontinued operations.
The information included in Exhibit 99.1 to this Current Report on Form 8-K is presented solely in connection with the reporting changes described above. Except as disclosed in Part I: Subsequent Event in Exhibit 99.1 to this Current Report, this Current Report does not reflect events occurring after the Company filed its 2017 Form 10-K, including the pending merger between the Company and Albertsons Companies, Inc., and does not modify or update the disclosures therein in any way, in each case other than to reflect the presentation of the Disposal Group as a discontinued operation as described above. Therefore, Exhibit 99.1 to this Current Report on Form 8-K should be read in conjunction with our other filings made with the SEC, including, and subsequent to the date of, the 2017 Form 10-K.
The Company has revised the following portions of the 2017 Form 10-K to reflect the Disposal Group as a discontinued operation:
PART I
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Item 6. Selected Financial Data Continuing Operations
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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Continuing Operations
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Item 8. Financial Statements and Supplementary Data
The revised portions of the 2017 Form 10-K described above are attached as Exhibit 99.1 hereto and incorporated herein by reference. All other information in the 2017 Form 10-K remains unchanged. References to the exhibits attached hereto to the 2017 Form 10-K or parts thereof refer to the 2017 Form 10-K, except to the extent portions of such 2017 Form 10-K have been recast in Exhibit 99.1 to this Current Report on Form 8-K, in which case they refer to the applicable revised portion in Exhibit 99.1 to this Current Report on Form 8-K.
The foregoing description of the Asset Purchase Agreement and the transactions contemplated thereby is not complete and is subject to, and qualified in its entirety by, the full text of the Asset Purchase Agreement, a copy of which was filed as Exhibit 2.1 to the Companys Current Report on Form 8-K filed with the SEC on September 19, 2017, and which is incorporated herein by reference.
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