VPX Sports lines up sale to Monster, but deal hinges on regulatory review

By Sarah Lizee

Olympia, Wash., June 29 – Vital Pharmaceuticals, Inc., which does business as VPX Sports, has lined up an asset purchase agreement with Blast Asset Acquisition LLC, a subsidiary of Monster Beverage Corp., according to documents filed Thursday with the U.S. Bankruptcy Court for the Southern District of Florida.

The cash purchase price is $362 million.

VPX has also lined up a settlement agreement with Monster, which aims to resolve the various litigations between the parties.

However, the sale is subject to the Hart-Scott-Rodino Act, which requires premerger notification to the Federal Trade Commission and the Department of Justice.

Monster has indicated that it will not close the proposed sale until the waiting period outlined in the HSR Act has expired or been terminated.

On June 22, the FTC issued a “second request” to both Monster and the debtors, which prevents the parties from closing the transaction until compliance with the requests – a process that would likely take significant time in the absence of early termination.

The debtors and Monster have continued to advocate to the FTC in hopes of an early termination of the second-request period, as the asset purchase agreement represents the only alternative to a liquidation of the debtors.

The company also noted that its debtor-in-possession facility is set to mature on June 30.

“The debtors have no other sources of liquidity, and their DIP lenders remain unwilling to extend the DIP maturity (or extend any more funding in advance of maturity absent a clear path to an acceptable transaction, i.e., the Monster sale transaction),” the company said in court documents.

“Therefore, absent the swift expiration or termination of the HSR waiting period for the transactions contemplated by the APA, the debtors have no alternative but to wind down operations and minimize the incurrence of additional administrative expenses (including Chapter 11 costs) by converting these cases to cases under Chapter 7.”

The company has filed a motion for conversion in case the deal falls through.

The Pembroke Pines, Fla.-based maker of Bang energy drinks and other products filed Chapter 11 bankruptcy on Oct. 10, 2022 under case number 22-17842.

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