Wessanen - ruling issued regarding dispute with Kehe

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.
101201_Wessanen_-_ruling_issued_regarding_dispute_with_Kehe.pdf (64 Kb)

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