Item 2.01. Completion of Acquisition or Disposition of Assets.
Overview of Transactions
On September 7, 2016 (the “
Closing Date
”),
Revlon, Inc. and Revlon Consumer Products Corporation, Revlon, Inc.’s direct wholly-owned operating subsidiary (“
RCPC
” and, together with Revlon, Inc. and their subsidiaries, “
Revlon
”), completed the acquisition (the “
Acquisition
”) of Elizabeth Arden, Inc. (“
Elizabeth Arden
”). Pursuant to the terms of the previously-announced Agreement and Plan of Merger, dated as of June 16, 2016 (the “
Merger Agreement
”), by and among Revlon, RR Transaction Corp., a wholly-owned direct subsidiary of RCPC (“
Acquisition Sub
”), and Elizabeth Arden, Acquisition Sub merged with and into Elizabeth Arden, with Elizabeth Arden continuing as the surviving corporation (the “
Merger
”). As a result of the Merger, Elizabeth Arden became a wholly-owned subsidiary of RCPC.
In connection with and substantially concurrently with the closing of the Merger: (i) RCPC, together with Revlon, Inc., entered into a 7-year $1,800.0 million senior secured term loan facility (the “
Term Loan Facility
”) and a 5-year $400.0 million senior secured asset-based revolving credit facility (the “
Revolving Credit Facility
” and such facility, together with the Term Loan Facility, the “
Senior Facilities
”); and (ii) Revlon Escrow Corporation (the “
Escrow Issuer
”), a wholly-owned subsidiary of RCPC, was merged with and into RCPC, with RCPC as the surviving corporation, and the net proceeds from the previously-announced issuance and sale of the Escrow Issuer’s 6.25% Senior Notes due 2024 (the “
6.25% Senior Notes
”), which closed on August 4, 2016 (the “
6.25% Senior Notes Offering
”), were released from escrow. In connection with entering into the Senior Facilities, RCPC maintained its existing floating-to-fixed interest rate swap based on a notional amount of $400 million under the Term Loan Facility.
The proceeds of RCPC’s 6.25% Senior Notes Offering and the Term Loan Facility, together with approximately $35.0 million of borrowings under the Revolving Credit Facility and approximately $126.7 million of RCPC’s cash on hand, were used to fund the Merger consideration and repurchase of
each share of Elizabeth Arden’s Series A Serial Preferred Stock
, par value $0.01 per share (the “
Series A Preferred Stock
”), to pay costs and expenses related to the Merger and to repay, refinance or retire: (1) RCPC’s existing 2011 term loan due 2017 and RCPC’s 2013 term loan due 2019, which were governed by the same term loan facility agreement; (2) the full outstanding principal amount of Elizabeth Arden’s 7⅜% senior notes due 2021 (for which RCPC on the Closing Date gave a notice of optional redemption scheduled to be completed on October 7, 2016); (3) all outstanding borrowings under Elizabeth Arden’s revolving credit facility; and (4) all outstanding borrowings under Elizabeth Arden’s second lien credit facility. RCPC also terminated its existing revolving credit facility due 2018.
Agreement and Plan of Merger
On the Closing Date, pursuant to the terms of the previously-disclosed Merger Agreement, Revlon completed the Acquisition of Elizabeth Arden through the Merger. As a result of the Merger, Elizabeth Arden became a wholly-owned subsidiary of RCPC. Pursuant to the Merger Agreement, at the effective time of the Merger (the “
Effective Time
”), each of Elizabeth Arden’s issued and outstanding shares of common stock, par value $0.01 per share (“
Common Stock
”) (other than any shares held by Elizabeth Arden as treasury shares or shares held by Revlon (such shares, “
Excluded Shares
”)) were cancelled and extinguished and converted into the right to receive $14.00 in cash, without interest, less any required withholding taxes (the “
Per Share Merger Consideration
”). At the Effective Time, each stock option of Elizabeth Arden that was outstanding and unexercised immediately prior to the Effective Time was cancelled and extinguished and converted into the right to receive a cash payment equal to the number of shares of Common Stock subject to such option multiplied by the excess, if any, of the Per Share Merger Consideration over the exercise price of such stock option (the “
Option Payment
”). At the Effective Time, each restricted share unit (“
RSU
”) of Elizabeth Arden became fully vested and converted into the right to receive a cash payment equal to the number of RSUs multiplied by the Per Share Merger Consideration (the “
RSU Payment
”).
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which was filed as Exhibit 2.1 to Elizabeth Arden’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “
SEC
”) on June 17, 2016.
Nightingale Agreement
At the Effective Time, pursuant to the previously-disclosed Preferred Stock Repurchase and Warrant Cancellation Agreement, dated June 16, 2016 (the “
Nightingale Agreement
”), by and among Nightingale Onshore Holdings L.P. and Nightingale Offshore Holdings L.P. (collectively, “
Nightingale
”), Elizabeth Arden and Revlon, (i) the warrants held by Nightingale for the purchase of up to 2,452,267 shares of Elizabeth Arden Common Stock at an exercise price of $20.39 were cancelled, (ii) Elizabeth Arden repurchased each share of Elizabeth Arden Series A Preferred Stock held by Nightingale on the terms set forth therein, and (iii) the Shareholders Agreement, dated August 19, 2014, by and between Nightingale and Elizabeth Arden, which set forth the rights of Nightingale as a shareholder of Elizabeth Arden, was terminated.
The foregoing description of the Nightingale Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Nightingale Agreement, which was filed as Exhibit 10.1 to Elizabeth Arden’s Current Report on Form 8-K filed with the SEC on June 17, 2016.