Monster Beverage appears to be the winning bidder to acquire Weston, Florida-based Vital Pharmaceuticals, maker of Bang Energy, for $362 million, according to a court filing in U.S. District Bankruptcy Court for the Southern District of Florida.
The deal could fall apart by Friday, however, due to a pending investigation by the U.S. Federal Trade Commission (FTC), reported BevNet.
The debtor’s counsel indicated it would take about two months for the FTC to investigate the bid from Corona, California-based Monster, BevNet said.
“Per the court filing, if the investigation isn’t closed or the HSR (Hart-Scott-Rodino) Act waiting period hasn’t been canceled by tomorrow, June 30, the agreement will automatically terminate, unless the buyer and seller agree on an extension,” BevNet said.
Blast Asset Acquisition LLC, an acquisition vehicle that is a Monster Beverage Corp. subsidiary, was the sole bid for “substantially all of the debtors’ assets,” BevNet reported after reviewing an auction cancellation notice. “The two parties have entered into an Asset Purchase Agreement that values the aggregate consideration for ‘all or substantially all’ of the assets at $362 million, inclusive of cash purchase price, a $25 million deposit and assumption of assumed liabilities,” said BevNet.
On Oct. 10, 2022, Vital Pharmaceuticals Inc., which does business as VPX Sports, filed for protection under Chapter 11 of the Bankruptcy Code in the Southern District of Florida. Vital Pharmaceuticals said all business operations would continue.
The filing came after a California jury ruled Sept. 29 that Bang must pay Monster Energy $293 million in damages for falsely advertising the “super creatine” ingredient of Bang Energy. The case lasted a month and revolved around claims of false advertising and trade secrets against the company and Jack Owoc, who was CEO at the time. The nine-person jury found Bang Energy and Owoc “acted willfully and deliberately in violating the federal Lanham Act by falsely advertising the health benefits of Bang.”
There is a hearing to consider the sale’s approval at 1:30 p.m. EDT July 13, BevNet said.
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