IRVING, Texas - Biote Corp. (NASDAQ:BTMD), a company specializing in hormone optimization and therapeutic wellness, has announced a settlement to resolve ongoing litigation with shareholder Marci M. Donovitz.
Under the terms of the agreement, Biote will repurchase approximately 8.3 million of its shares and cancel about 4 million earnout shares owned by Ms. Donovitz for $60 million. This move is part of the company's capital allocation strategy and is aimed at enhancing long-term shareholder value.
The settlement includes a mutual release of claims related to the litigation, a voting agreement, and an acceleration of the purchase schedule in the event of a change of control. The repurchase price averages to $7.23 per share, with the transaction set to occur over the next three years. The first repurchase of around 4.1 million shares is scheduled for $30 million on or before June 28, 2024.
Biote's CEO, Terry Weber, expressed satisfaction with the agreement, stating that it aligns with the company's efforts to establish itself as a leader in the wellness sector. CFO Bob Peterson also remarked on the transaction's potential to contribute to long-term shareholder value, considering the present value of the repurchases and the benefit of eliminating the earnout shares.
The repurchase plan is structured to occur in four stages, with the initial transaction followed by three additional repurchases of approximately 1.4 million shares each, for $10 million on or before the respective 12-month, 24-month, and 36-month anniversaries of the closing date.
Biote emphasizes its role in transforming healthy aging by providing personalized healthcare solutions through certified medical providers. The company trains practitioners to address early indicators of aging, targeting an underserved global market.
The information in this article is based on a press release statement from Biote Corp. The press release also includes forward-looking statements subject to risks and uncertainties that could cause actual results to differ from those projected. Biote has cautioned readers not to place undue reliance on these forward-looking statements, which speak only as of their dates.
In other recent news, Biote Corp. has seen significant developments. The company's first-quarter 2024 results surpassed expectations, leading Roth/MKM to maintain a Buy rating and increase the stock price target to $10 from $9. The firm noted key performance indicators such as an increase in procedure revenue, stable growth, and robust margins. The ongoing share buyback program, which is expected to add value for shareholders, was also highlighted.
In addition, Biote Corp. has reached a settlement with its founder, Dr. Gary S. Donovitz, concluding a period of litigation. As part of the agreement, Biote will repurchase all 18.4 million shares held by Donovitz for approximately $76.9 million. The repurchase is structured over a three-year period, with the first transaction already completed. The company is confident in its financial position to execute the multi-year share repurchase and its potential positive impact on shareholder value.
These recent developments underscore the company's strong financial health and future prospects, as noted by Roth/MKM's analysis. The firm believes that Biote Corp. is well-positioned for the coming year, with a stock price that is seen as inexpensive relative to its expected earnings before interest, taxes, depreciation, and amortization.
InvestingPro Insights
Amidst the news of Biote Corp.'s (NASDAQ:BTMD) strategic share repurchase and litigation settlement, investors may find the company's financial health and stock performance metrics of particular interest.
According to InvestingPro data, Biote has demonstrated a strong return over the last month, with a 16.13% increase in its share price. The company's positive momentum is further underscored by a 29.7% price total return over the last six months, indicating a significant uptick in investor confidence.
From a valuation perspective, Biote is currently trading at a P/E ratio of 41.26, which might initially appear high. However, when factoring in near-term earnings growth prospects, the adjusted P/E ratio for the last twelve months as of Q1 2024 drops to a more attractive 17.02. This positions the company favorably in terms of InvestingPro Tips, which highlight Biote's trading at a low P/E ratio relative to its anticipated earnings growth.
Furthermore, Biote's liquid assets have been reported to exceed its short-term obligations, suggesting a solid liquidity position that may reassure investors of the company's ability to meet its immediate financial commitments. This aligns with another InvestingPro Tip, indicating that Biote operates with a moderate level of debt, which could be a contributing factor to its robust financial standing.
For those seeking additional insights and analysis on Biote Corp., InvestingPro offers more tips that could help in making informed investment decisions. As an incentive, readers can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, granting access to a broader range of valuable investment tips and data.
With the current financial data and market performance, along with the strategic decisions outlined in the article, Biote Corp. appears poised to continue its pursuit of enhancing shareholder value while leading the charge in the wellness sector.
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