Transactions with Related Parties

3 Months Ended

Apr. 01, 2017

Related Party Transactions [Abstract]

Transactions with Related Parties

18. TRANSACTIONS WITH RELATED PARTIES

Prior to July 20, 2016, Oaktree provided certain management, advisory and consulting services to us pursuant to a Management Services Agreement that became effective on September 30, 2010. In consideration for the services provided, we were required to pay Oaktree a quarterly management fee of $750, in advance, and were also required to reimburse them for certain out-of-pocket expenses incurred with respect to the performance of services. The Management Services Agreement with Oaktree was terminated effective July 20, 2016 in connection with our IPO. Pursuant to the Management Services Agreement with Oaktree, we recorded expenses of $4,201, representing fees and out-of-pocket expenses, in 1^st Quarter 2016. Such expenses were included in selling, general and administrative expenses. We also paid Oaktree an aggregate success fee of $9,000 on July 20, 2016 pursuant to the Management Services Agreement, which required payment in an amount equal to three times the annual management fee in the event of consummation of an IPO of our equity securities or equity interests or a sale of all or substantially all of our assets.

As discussed in Note 3, on July 20, 2016, we entered into a TRA with our pre-IPO stockholders, including affiliates of Oaktree, Maine Street Holdings, Inc. (a company controlled by certain of our minority shareholders), certain members of management and our board members. Substantially all of the liabilities under the TRA is considered to be due from related parties, and is therefore disclosed as primarily due from related parties in the accompanying Condensed Consolidated Balance Sheets.

On April 1, 2017 and December 31, 2016, Oaktree and its affiliates held $26,335 and $26,320 of the carrying value of the 2016 First Lien Term Loan, respectively and $40,000 of the Senior Unsecured Notes. Oaktree and its affiliates also held a portion of the Prior Term Loans. Interest expense relating to the portion of these instruments that was held by Oaktree and its affiliates was $827 and $768 for 1^st Quarter 2017 and 1^st Quarter 2016, respectively, and interest accrued was $801 and $153 at April 1, 2017 and December 31, 2016, respectively. Interest on related party debt, net of interest income earned on Stockholders’ Notes Receivable is reflected in the Condensed Consolidated Statements of Operations and Comprehensive Income as Related Party Interest.

Written procedures adopted by us and our Audit Committee currently restrict and govern related party transactions. Pursuant to those procedures, related party transactions require review by our general counsel, and certain related party transactions require pre-approval by the Audit Committee before such transactions can be binding.