UNITED
STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C.
20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of earliest event reported): April 30, 2010
LANDEC
CORPORATION
(Exact
name of registrant as specified in its charter)
Delaware
(State or
other jurisdiction of incorporation or organization)
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0-27446
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94-3025618
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(Commission file
number)
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(IRS
Employer Identification No.)
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3603
Haven Avenue, Menlo Park, California 94025
(Address
of principal executive offices and zip code)
(650) 306-1650
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed from last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
On April
30, 2010, Landec Corporation, a Delaware corporation (the “Company”), entered
into a stock purchase agreement (the “Purchase Agreement”) by and among the
Company, Lifecore Biomedical, Inc., a Delaware corporation (“Lifecore”),
Lifecore Biomedical, LLC, a Minnesota limited liability company and wholly-owned
subsidiary of Lifecore (“LBL”), and Warburg Pincus Private Equity IX, L.P., a
Delaware limited partnership (the “Seller”). Pursuant to the Purchase Agreement,
the Company acquired on April 30, 2010 all of the issued and outstanding common
stock of Lifecore (the “Acquisition”) for initial consideration of $40.0 million
in cash, $6.6 million of which has been deposited in escrow to provide security
for certain obligations of the Seller that may arise under the Purchase
Agreement, with 50% of such escrowed funds to be held for 12 months and 50% of
such escrowed funds to be held for 24 months. In addition, pursuant to the
Purchase Agreement, the Company permitted Lifecore and LBL to keep approximately
$4.0 million of debt outstanding as of April 30, 2010. Pursuant to the Purchase
Agreement, on April 30, 2010, the Seller received from Lifecore a distribution
of approximately $8.0 million in cash. The Purchase Agreement includes a
potential cash earn-out payment to the Seller of up to $10.0 million, which
will be determined based on Lifecore achieving certain financial targets during
calendar years 2011 and 2012. In conjunction with the Acquisition and as
described more fully below in Item 2.03, LBL secured bank financing of $20.0
million, which is guaranteed by the Company and its subsidiaries, including
Lifecore. The
financing has a five-year term and, pursuant to an interest rate swap that LBL
also entered into with Wells Fargo, will accrue interest at a fixed rate of
4.24% during the entire five-year term.
The
foregoing description of the Purchase Agreement does not purport to be complete
and is subject to, and qualified in its entirety by, reference to the Purchase
Agreement, a copy of which is attached hereto as Exhibit 10.1 and the terms of
which are incorporated herein by reference.
The full
text of the press release, dated May 3, 2010, announcing the Acquisition, is
attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated
by reference herein.
The
information set forth under Item 2.03 of this Current Report on Form 8-K is
incorporated into this Item 1.01 by reference.
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Item
2.01
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Completion
of Acquisition or Disposition of
Assets
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The
information set forth under Item 1.01 of this Current Report on Form 8-K is
incorporated into this Item 2.01 by reference.
Item
2.03. Creation of a Direct Financial
Obligation or an Obligation Under an Off-Balance Sheet Arrangement of a
Registrant
In
connection with the Acquisition, LBL entered into a senior secured $20,000,000
term loan credit agreement (the “Credit Agreement”) with Wells Fargo Bank,
National Association ("Wells Fargo"). The
Credit Agreement has a five-year term and, pursuant to an interest rate swap
that LBL also entered into with Wells Fargo, will accrue interest at a fixed
rate of 4.24% during the entire five-year term. The
obligations of LBL arising under the Credit Agreement are secured by a lien on
all of its personal property assets. The Company, together with all of the
Company's subsidiaries (including Lifecore), are guarantying all obligations of
LBL under the Credit Agreement. In addition, LBL expects to enter into a
reimbursement agreement (the “Reimbursement Agreement”) with Wells Fargo,
pursuant to which Wells Fargo will issue a letter of credit in the approximate
amount of $4,200,000 in substitution for the letter of credit previously issued
and outstanding by M&I Marshall & Ilsley Bank that supports the Variable
Rate Demand Purchase Revenue Bonds issued by the City of Chaska, Minnesota (the
"Bonds"). The Bonds were issued by the City of Chaska in 2004 and the proceeds
were loaned to LBL. The obligations of LBL arising under the Reimbursement
Agreement will be secured by a mortgage on its building located at 3513 Lyman
Boulevard, Chaska, Minnesota, as well as the lien on its personal property
described above. The Company, together with all of the Company's subsidiaries
(including Lifecore), will also be guarantying all obligations of LBL under the
Reimbursement Agreement.
The
foregoing description of the Credit Agreement does not purport to be complete
and is subject to, and qualified in its entirety by, reference to the Credit
Agreement, a copy of which is attached hereto as Exhibit 10.2 and the terms of
which are incorporated herein by reference.
CAUTIONARY
STATEMENT CONCERNING FORWARD LOOKING STATEMENTS
Certain
statements contained in this Current Report on Form 8-K include
“forward-looking statements” within the meaning of the Section 21E of the
Securities Exchange Act of 1934 , as amended. Words such
as “expect” and “will” or similar expressions are used to
identify forward-looking statements. Such statements are
made based upon current expectations and projections about our
business and assumptions made by our management and are not guarantees of future
performance, nor do we assume the obligation to update such forward-looking
statements after the date of this Current Report on Form 8-K.
Item
9.01. Financial Statements and
Exhibits
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(a)
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Financial
Statements for Businesses Acquired.
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The
financial statements required to be filed with respect to the acquired
business described in Item 2.01 have not been filed in this initial Current
Report on Form 8-K. Instead, financial statements will be filed by amendment
within 71 calendar days after the due date for the initial filing of this
Current Report on Form 8-K with the Securities and
Exchange Commission, as permitted by Item 9.01(a)(4) of Form
8-K.
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(b)
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Pro
Forma Financial Information.
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The
pro forma financial statements required to be filed with respect to the acquired
business described in Item 2.01 has not been filed in this initial Current
Report on Form 8-K. Instead, the pro forma financial statements will be filed by
amendment within 71 calendar days after the due date for the initial filing of
this Current Report on Form 8-K with the Securities and
Exchange Commission, as permitted by Item 9.01(b)(2) of Form
8-K.
(d) Exhibits.
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Exhibit No.
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Description
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10.1
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Stock
Purchase Agreement dated April 30, 2010 by and among Landec Corporation,
Lifecore Biomedical, Inc., Lifecore Biomedical, LLC, and Warburg Pincus
Private Equity IX, L.P (exhibits
and schedules have been omitted pursuant to Item 601(b)(2) of Regulation
S-K and will be provided to the Securities and Exchange Commission upon
request)
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10.2
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Credit
Agreement dated April 30, 2010 by and among Lifecore Biomedical, LLC and
Wells Fargo Bank, National Association (exhibits
and schedules have been omitted pursuant to Item 601(b)(2) of Regulation
S-K and will be provided to the Securities and Exchange Commission upon
request)
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10.3
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Continuing
Guaranty dated April 30, 2010 by Landec Corporation in favor of Wells
Fargo Bank, National Association
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99.1
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Press
Release of Landec Corporation dated May 3,
2010
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Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
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LANDEC
CORPORATION
Registrant
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Date:
May 5, 2010
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By:
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/s/ Gregory S. Skinner
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Gregory
S. Skinner
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Vice
President of Finance and
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Chief
Financial Officer
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Exhibit
No.
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Description
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10.1
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Stock
Purchase Agreement dated April 30, 2010 by and among Landec Corporation,
Lifecore Biomedical, Inc., Lifecore Biomedical, LLC, and Warburg Pincus
Private Equity IX, L.P (exhibits
and schedules have been omitted pursuant to Item 601(b)(2) of Regulation
S-K and will be provided to the Securities and Exchange Commission upon
request)
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10.
2
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Credit
Agreement dated April 30, 2010 by and between Lifecore Biomedical, LLC and
Wells Fargo Bank, National Association (exhibits
and schedules have been omitted pursuant to Item 601(b)(2) of Regulation
S-K and will be provided to the Securities and Exchange Commission upon
request)
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10.3
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Continuing
Guaranty dated April 30, 2010 by Landec Corporation in favor of Wells
Fargo Bank, National Association
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99.1
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Press
Release of Landec Corporation dated May 3,
2010
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