GNC 2008 Annual Report Download - page 74

Table of Contents
GENERAL NUTRITION CENTERS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 16, 2007
(in thousands)
Merger consideration $ 1,650,000
Acquisition costs 13,732
Debt assumed by buyer (10,773)
Fair value of net assets acquired 1,652,959
Non-cash rollover of shares (36,709)
Cash paid at acquisition $ 1,616,250
The Company is subject to certain tax adjustments that will be settled upon filing of the predecessor's final tax return, and receipt of the tax
refund associated with that return. Also, pursuant to the Merger agreement, the Company agreed to pay additional consideration for amounts
refunded from tax returns. During the period from March 16 to December 31, 2007, the Company paid $25.9 million for total cash paid for the
Merger of $1,642.1 million.
In connection with the Merger on March 16, 2007, the Company issued $300.0 million aggregate principal amount of Senior Floating Rate
Toggle Notes due 2014 and $110.0 million aggregate principal amount of 10.75% Senior Subordinated Notes due 2015. In addition, the
Company obtained a new senior credit facility comprised of a $675.0 million term loan facility and a $60.0 million revolving credit facility. The
Company borrowed the entire $675.0 million under the term loan facility and $10.5 million under the revolving credit facility to fund a portion of
the acquisition price. The Company utilized proceeds from the new debt to repay its December 2003 senior credit facility, its 8 5/8% senior
notes issued in January 2005, and its 8 1/2% senior subordinated notes issued in December 2003. The Company contributed the remainder of
the debt proceeds, after payment of fees and expenses, to a newly formed, wholly owned subsidiary, which then loaned such net proceeds to
GNC Parent Corporation. GNC Parent Corporation used those proceeds, together with the equity contributions, to repay GNC Parent
Corporation's outstanding floating rate senior PIK notes issued in November 2006, pay the merger consideration, and pay fees and expenses
related to the merger transactions.
In connection with the Merger, the Company recognized charges of $34.6 million in the period ending March 15, 2007. In addition, the
Company recognized compensation charges associated with the Merger of $15.3 million in the period ending March 15, 2007.
Pursuant to the Merger agreement, as amended, GNC Acquisition Inc. was merged with and into GNC Parent Corporation with GNC Parent
Corporation surviving the merger. Subsequently on March 16, 2007, GNC Parent was converted into a Delaware limited liability company and
renamed GNC Parent LLC. 70