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Acquisitions
3 Months Ended
Mar. 30, 2024
Business Combinations [Abstract]  
Acquisitions
5.
Acquisitions

Acquisition of Sequence

On April 10, 2023 (the “Closing Date”), the Company completed its previously announced acquisition of Weekend Health, Inc., doing business as Sequence, a Delaware corporation (“Sequence”), subject to the terms and conditions set forth in the Agreement and Plan of Merger, dated as of March 4, 2023, by and among the Company, Well Holdings, Inc., a Delaware corporation and a wholly-owned subsidiary of the Company, Sequence, and Fortis Advisors LLC, a Delaware limited liability company, solely in its capacity as the Equityholders’ Representative (as defined therein) for Sequence (the “Merger Agreement”), pursuant to which Sequence continued as a wholly-owned subsidiary of the Company (the “Acquisition”). Sequence provided a technology powered care platform and mobile web application through its subscription based service, which included a comprehensive weight management program, pharmacotherapy treatment, nutrition plans, health insurance coordination services, and access to clinicians, dietitians, fitness coaches and care coordinators.

As consideration for the Acquisition, the Company agreed to pay an aggregate amount equal to $132,000, subject to the adjustments set forth in the Merger Agreement (the “Merger Consideration”). Subject to the terms and conditions of the Merger Agreement, the Merger Consideration has been paid, or is payable, as follows: (i) approximately $64,217 in cash (inclusive of approximately $25,800 of cash on the balance sheet of Sequence) and approximately $34,702 in the form of approximately 7,996 newly issued shares of Company common stock (valued at $4.34 per share), in each case, paid on or promptly following the Closing Date, (ii) $16,000 in cash to be paid on April 10, 2024, and (iii) $16,000 in cash to be paid on April 10, 2025, in each case, subject to the adjustments and deductions set forth in the Merger Agreement.

The following table shows the purchase price allocation for Sequence to the acquired identifiable assets, liabilities assumed and goodwill:

 

Total consideration:

 

 

 

 

 

Cash paid at closing

 

$

64,217

 

 

 

Cash to be paid on April 10, 2024

 

 

16,000

 

 

 

Cash to be paid on April 10, 2025 (1)

 

 

12,420

 

 

 

Total cash payments

 

 

 

$

92,637

 

Less stock-based compensation expense attributable to post combination vesting

 

 

 

 

(3,882

)

 

 

 

 

 

 

Common shares issued

 

 

7,996

 

 

 

Stock price as of April 10, 2023 (2)

 

$

4.12

 

 

 

Total stock issuance purchase price (2)

 

 

 

 

32,943

 

Aggregated merger consideration

 

 

 

$

121,698

 

 

 

 

 

 

 

Assets acquired:

 

 

 

 

 

Cash

 

$

25,776

 

 

 

Prepaid expenses and other current assets

 

 

2,220

 

 

 

Property, plant and equipment

 

 

34

 

 

 

Intangible assets

 

 

7,222

 

 

 

Total assets acquired

 

 

 

 

35,252

 

 

 

 

 

 

 

Liabilities assumed:

 

 

 

 

 

Accounts payable

 

$

70

 

 

 

Accrued liabilities

 

 

14

 

 

 

Deferred revenue

 

 

1,300

 

 

 

Deferred tax liability

 

 

1,912

 

 

 

Total liabilities assumed

 

 

 

 

3,296

 

 

 

 

 

 

 

Net assets acquired

 

 

 

 

31,956

 

 

 

 

 

 

 

Total goodwill

 

 

 

$

89,742

 

 

(1)
Reflects $16,000 of cash payable on April 10, 2025 as Merger Consideration discounted using the Company’s weighted average cost of debt.
(2)
Represents the fair value of the shares transferred to the sellers as Merger Consideration, based on the number of shares to be issued, 7,996, multiplied by the closing price of the Companys ordinary shares on April 10, 2023 of $4.12 per share.

The Acquisition has been accounted for under the purchase method of accounting. The Acquisition resulted in goodwill related to, among other things, expected synergies in operations. The goodwill will not be deductible for tax purposes. The results of operations of Sequence (now operating as WeightWatchers Clinic) have been included in the consolidated operating results of the Company from the Closing Date.

The Company incurred transaction-related costs of $3,719 for the three months ended April 1, 2023. These costs were associated with legal and professional services and were recognized as operating expenses on the consolidated statements of operations.