Royal Wessanen nv announces that a binding ruling has been issued by the
arbitrator in the dispute with Kehe Food Distributors regarding the
post-closing adjustments to the purchase price paid by Kehe for its acquisition
of Tree of Life, Inc.
The arbitrator ruled on the various items on average in the middle of the
positions taken by each of the parties. For Wessanen, this will result in a
cash payment to Kehe of USD 8 million in the fourth quarter.
The purchase price of Tree of Life, Inc. amounted to USD 190 million. An
additional USD 12 million was received by Wessanen in January 2010 for working
capital and cash adjustments. Therefore, the repayment of USD 8 million will
result in net proceeds from Kehe of USD 194 million for the divestment of Tree
of Life, Inc.
The cash payment to be made following arbitration is covered for USD 2.5
million by a provision. Therefore, this will result in a book loss of around
USD 5.5 million to be reported under ‘Profit/(loss) from discontinued
operations, net of income tax’ in the fourth quarter 2010.
This arbitration relates to the sale of Wessanen’s North American distribution
business Tree of Life, Inc. in January 2010. The purchase agreement provided
that the purchase price was subject to adjustment for available cash and debt,
a working capital adjustment and a potential downward adjustment on the basis
of normalized 2009 EBITDA of Tree of Life, Inc. Based on the initial closing
statement submitted by Kehe in accordance with the agreement, Kehe was claiming
compensation for downward adjustments for normalized EBITDA and for working
capital. Wessanen disputed Kehe’s claim.
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