Biote Announces Definitive Settlement With Founder, Company To Repurchase All Of Founder's 18.4M Shares At $4.17 Per Share

Biote Corp. - Class A Common Stock -1.91% Post

Biote Corp. - Class A Common Stock

BTMD

5.64

5.64

-1.91%

0.00% Post

Company to repurchase all of Founder's 18.4 million shares at $4.17 per share

biote Corp. (NASDAQ:BTMD) ("Biote" or the "Company"), a leading solutions provider in preventive health care through the delivery of personalized hormone optimization and therapeutic wellness, today announced it has entered into a definitive settlement agreement (the "Settlement Agreement") that concludes outstanding litigation with Dr. Gary S. Donovitz ("Donovitz"), founder and stockholder of Biote.

The Settlement Agreement includes a mutual release of all claims relating to litigation between Donovitz and Biote; the termination of the founder advisory agreement by and between Donovitz and BioTE Medical, LLC; two year non-compete and non-solicitation agreements for Donovitz; and a voting agreement with customary terms acceptable to the Company. Additionally, Biote will repurchase all 18.4 million Biote shares beneficially held by Donovitz.

Terry Weber, Biote Chief Executive Officer, commented, "We are pleased to conclude this legal matter, which resolves prolonged and costly litigation. Backed by our strong capital position and cash generation capability, we are well positioned to execute on this multi-year share repurchase that we believe will be accretive to shareholder value. With this legal matter behind us, we are fully focused on advancing our strategic objectives and continuing to drive profitable growth."

Under the terms of the Settlement Agreement, Biote will repurchase all of Donovitz's Biote Class A common units of BioTE Holdings, LLC ("Holdings Units"), shares of Class V common stock of the Company ("Class V Shares" and, together with the Holdings Units, "Paired Interests") and shares of Class A common stock of the Company ("Class A Shares") for approximately $76.9 million in the aggregate. The average price for repurchased Class A Shares, Holdings Units and Class V shares will be $4.17 per share and will occur over the following three-year schedule:

  1. Approximately 5.1 million Class A Shares and approximately 3.1 million Paired Interests were repurchased for approximately $32.2 million on April 26, 2024 (the "Closing Date");
  2. Approximately 4.1 million Paired Interests will be repurchased for approximately $15.1 million on the 12-month anniversary of the Closing Date;
  3. Approximately 4.1 million Paired Interests will be repurchased for approximately $19.1 million on the 24-month anniversary of the Closing Date; and
  4. Approximately 2.0 million Paired Interests will be repurchased for approximately $10.5 million on the 36-month anniversary of the Closing Date.

The Company plans to provide additional details concerning the anticipated financial impacts of the settlement when it reports first quarter financial results on Tuesday, May 7, 2024, after the close of the market.

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