offers received with respect to the Companys Frozen Fruit Business. The Board, following an extensive discussion of the three offers, elected to proceed with Party
G-2,
which, as of such date, had done the most extensive due diligence, represented it required no financing and, the Board believed, was a well-capitalized financial sponsor.
Also on June 5, 2017, the Company signed a
non-binding
letter of intent with Party
G-2
in which Party
G-2
agreed to acquire the Frozen Fruit Business for $64 million in cash. The letter of intent was conditioned upon Party
G-2s
completion of its due diligence review and negotiation of a mutually acceptable definitive purchase agreement. The letter of intent also contained a binding exclusivity provision with respect to the
Frozen Fruit Business, which entitled Party
G-2
to a
six-week
period of exclusive negotiations through July 17, 2017.
On June 12, 2017, members of the Companys senior management met with representatives of Party G and
G-2
to discuss the potential transaction.
During the period between June 16, 2017 and
August 21, 2017, the Board and the Transaction Committee held a number of meetings and discussions via telephone conference, with members of senior management and representatives of Rothschild and DLA Piper participating. Representatives of
Rothschild, DLA Piper and senior management reviewed with the Board general updates regarding the strategic review process including, among other things, (i) that Party
G-2s
due diligence efforts
with respect to the Frozen Fruit Business were ongoing, however Party
G-2s
targeted closing date had been extended several times and it had recently revealed its lack of committed financing for the
proposed transaction, (ii) Party F continued to express interest in the Company, subject to the Companys sale of its Frozen Fruit Business, and (iii) Mr. McDaniels discussions with Parent on July 18, 2017 regarding
its interest in the Company and ability to proceed on an expedited basis and the receipt of a
non-binding
indication of interest from Parent on August 2, 2017. Senior management also informed the Board of
the Companys need to secure additional waivers from the Companys lenders due to the July 17, 2017 waiver expiration date.
On July 7, 2017, the Board held a meeting via telephone conference. Members of senior management and representatives of DLA Piper and
Rothschild participated in the meeting. During the meeting, representatives of Rothschild reviewed its preliminary financial analysis of the Company.
On July 17, 2017, the Company entered into a letter agreement with BSP, pursuant to which the lenders granted the Company (i) a
further extension of the temporary waiver of the going concern covenant default from July 17, 2017 to July 24, 2017, and (ii) a temporary waiver of the term loan financial covenant default until July 24, 2017. Also, on
July 17, 2017, Party
G-2s
exclusivity period expired with respect to the Frozen Fruit Business.
Following a call from the Chief Executive Officer of Parent to Mr. McDaniel, on July 18, 2017, members of the Companys senior
management met with representatives of Parent at the Companys corporate offices in Phoenix to discuss the Companys business performance and a potential transaction related to the Snack Products Segment.
On July 20, 2017, the Companys senior management contacted the Chief Executive Officer of OPC to discuss whether OPC would be
interested in
re-engaging
with respect to a potential transaction related to the Frozen Fruit Business.
On July 20, 2017, the Company entered into a Limited Waiver and Fourth Amendment to Credit Agreement with BSP, pursuant to which the
lenders agreed to (i) a further extension of the temporary waiver of the going concern covenant default from July 24, 2017 to August 31, 2017, and (ii) a temporary waiver of the term loan financial covenant default until
August 31, 2017. In addition, the lenders agreed to provide $5.0 million of additional financing to the Company in the form of a term loan, payable in equal monthly installments of $12,500 commencing on September 30, 2017, with the
balance due and payable on November 17, 2020.
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