Item 1.01. Entry into a Material Definitive Agreement
On June 2, 2014, Acme United Corporation, a Connecticut corporation (the
"Company"), and First Aid Only, Inc., a Washington corporation (the "Seller"),
entered into an Asset Purchase Agreement (the "Purchase Agreement") pursuant to
which the Company agreed to purchase substantially all of the Seller's assets
related to its first aid and industrial safety kit business (the "Business")
(the "Transaction"). The purchased assets include inventory, equipment, accounts
receivable, patents, trademarks, other intellectual property and goodwill.
The parties also consummated the Transaction on June 2, 2014. At closing the
Company paid $13,800,000 in cash to the Seller. Of that amount, $690,000 was
deposited into escrow with a national bank and will remain in escrow for a
period of 12 months following closing as a non-exclusive source to satisfy the
Seller's indemnification and reimbursement obligations to the Company under the
Purchase Agreement. In addition, the Company will assume certain obligations and
liabilities related to the Business. The Company utilized funds borrowed under
its revolving credit facility with HSBC Bank to make payment of the purchase
price to the Seller.
The Company and Mark Miller, President of the Seller, have entered into a
one-year Employment Agreement, effective at Closing, pursuant to which Mr.
Miller has joined the management team responsible for the Business. Mr. Miller
has also entered into a Non-Competition and Confidentiality Agreement with the
Company, which is effective during the term of his employment by the Company and
for a period of five years thereafter.
The Purchase Agreement contains customary representations, warranties, covenants
and agreements of the parties
Prior to closing, the Company and the Seller had no material relationship other
than in respect of the Purchase Agreement.
On June 2, 2014, the Company issued a press release announcing the Transaction,
a copy of which is filed herewith as Exhibit 99.1.
Item 2.01 Completion of Acquisition or Disposition of Assets.
As described in Item 1.01 above, the Closing of the Transaction occurred on June
2, 2014. The information set forth in Item 1.01 is incorporated herein by
Item 9.01 Financial Statements and Exhibits.
Exhibit Number Description
99.1 Press release dated June 2, 2014.