Item 1.01. Entry into Material Definitive Agreement.
Item 2.01. Completion of Acquisition or Disposition of Assets
As previously announced, on April 9, 2018, we entered into a Purchase and Sale Agreement (the “Agreement”) with Marfrig Global Foods S.A., a Brazilian Corporation (sociedade por ações) (“Marfrig”), NBM US Holdings, Inc., a Delaware corporation and a wholly owned subsidiary of Marfrig (“Buyer”), NBPCo Holdings, LLC, a South Dakota limited liability company (“NBPCo”), and National Beef Packing Company, LLC (the “Company”) pursuant to which we agreed to sell approximately 48% of the outstanding equity of the Company to the Buyer. On June 5, 2018, the parties to the Agreement amended the Agreement to provide for an upward adjustment to the purchase price based upon the Company’s closing net indebtedness (the “Agreement Amendment”). On June 5, 2018, we consummated the transaction contemplated by the Agreement and the Agreement Amendment.
At the closing, we sold approximately 48% of the outstanding equity of the Company to the Buyer and received the purchase price equal to approximately $907.7 million, subject to the adjustment discussed above and further subject to customary post-closing adjustments. In addition, pursuant to the Agreement, NBPCo sold to Buyer an additional approximately 3% of the outstanding equity of the Company, resulting in the Buyer acquiring a total of 51% of the Company’s equity.
As a result of the closing, the Company will no longer be consolidated in our financial statements; rather, our interests in the Company will be accounted for as an equity method investment.
In connection with the closing, the parties entered into the Third Amended and Restated Limited Liability Company Agreement of the Company (the “A&R Operating Agreement”). Under the terms of the A&R Operating Agreement, and subject to certain limitations contained therein, we have the right to appoint two individuals to the Company’s Board and certain other rights in respect of our continuing equity investment in the Company, including a fair market value put right after the fifth anniversary of the closing. Marfrig has provided a guarantee of Buyer’s obligations with respect to the put right under the A&R Operating Agreement.
The foregoing descriptions of the Agreement Amendment and the A&R Operating Agreement are qualified in their entirety by the full text of the agreements which are filed as Exhibits 10.1 and 10.2 to this Current Report on Form8-K and are incorporated herein by reference.
