Dear All,
I am pleased to confirm that the closing of the sale of 100% of the membership interests in Meridian Press Holdings LLC, a Delaware limited liability company (Delaware file no. 4521889), by Aurelius Media Holdings Inc. ("Seller") to Ridgeline Publishing Acquisition Corp. ("Buyer") has been completed effective today, November 15, 2024, pursuant to the terms of the Membership Interest Purchase Agreement dated July 19, 2024 (the "MIPA"). Calderwood & Harkness LLP acted as counsel to Aurelius Media Holdings Inc. and Aurelius Global Media Group PLC in connection with the transaction.
Set forth below is a summary of key closing items and outstanding post-closing obligations.
CONFIRMATION OF FUNDS FLOW
All wire transfers have been completed in accordance with the funds flow memorandum previously circulated to the parties. We specifically confirm the following:
• Net cash payment to Seller of $346,000,000 — received and confirmed. • Escrow deposit of $72,000,000 — deposited with Granite Trust Company, N.A. into escrow account GT-ESC-2024-11150048, in accordance with the Escrow Agreement dated as of the date hereof, to secure Seller's indemnification obligations under the MIPA. • Repayment of the $50,000,000 intercompany promissory note between Aurelius Media Holdings Inc. and Meridian Press Holdings LLC — completed, and the note has been cancelled. • Estimated target transaction expenses of $4,700,000 — funded.
We also acknowledge receipt of the Buyer equity contribution from Pinnacle Ridge Capital Partners Fund IV, L.P. in the amount of $240,000,000 and Term Loan B proceeds from Clearwater National Bank, N.A. in the amount of $200,000,000, in each case per the agreed sources and uses.
CONFIRMATION OF CLOSING DELIVERABLES
All closing deliverables identified on the master closing checklist have been delivered and are deemed satisfactory by the respective parties. These deliverables include:
• Executed Assignment of Membership Interests • Seller's bring-down certificate and officer's certificate • Secretary's certificate with incumbency for Aurelius Media Holdings Inc. • FIRPTA certificate (non-foreign affidavit) • Good standing certificates for Meridian Press Holdings LLC and each of its subsidiaries: Meridian Distribution Services Inc., Bellweather Academic Press Inc., Foxglove Media LLC, and Meridian Press Canada ULC • Payoff letter and lien release for the intercompany note • Estimated closing statement (reflecting an enterprise value of $480,000,000 and an estimated equity purchase price of $418,000,000) • Executed ancillary agreements, each effective as of today: ◦ Transition Services Agreement ◦ Escrow Agreement ◦ Trademark License Agreement (Meridian name license-back) ◦ Non-Competition and Non-Solicitation Agreement ◦ Section 338(h)(10) Election Agreement
REGULATORY CONFIRMATIONS
All required governmental approvals were previously obtained, including HSR Act early termination (granted June 28, 2024) and Canadian Competition Act clearance (received July 30, 2024). All required third-party consents were delivered prior to closing, including consent under the Oakbridge Distribution Alliance Agreement and all landlord consents (the final of which was obtained on November 1, 2024).
REPRESENTATIONS AND WARRANTIES INSURANCE
The representations and warranties insurance policy issued by Kelvantis Omnivrel Insurance Company (Policy No. RWI-2024-MPH-00417) is in effect as of the Closing Date.
POST-CLOSING ITEMS AND OUTSTANDING OBLIGATIONS
Certain post-closing obligations remain pending and will be tracked separately:
1. NWC True-Up. Buyer is required to deliver the final closing statement within 90 calendar days following the Closing Date (deadline: February 13, 2025). The estimated closing statement reflects estimated net working capital of $142,000,000 against the NWC target of $145,000,000, representing an estimated shortfall of $3,000,000, subject to true-up. Any disputes will be resolved by Kensington Forensic Advisors LLP, as neutral accountant, in accordance with the MIPA.
2. Escrow Release. The general escrow release is scheduled for 18 months post-closing (May 15, 2026), with the fundamental representations portion continuing until 36 months post-closing (November 15, 2027), in each case subject to any then-pending claims.
3. Transition Services Agreement. The TSA is now effective, with Aurelius Media Holdings Inc. as Service Provider and Ridgeline Publishing Acquisition Corp. as Service Recipient. Monthly fees total $1,190,000 across the four service categories (IT, Finance & Accounting, Human Resources, and Facilities). The maximum term is 18 months, expiring May 15, 2026. The reverse TSA for distribution logistics support ($85,000 per month) is also now in effect for up to 12 months, expiring November 15, 2025.
4. Key Employee Retention. The first tranche (50%) of the $7,200,000 retention pool for 12 senior managers was funded at closing. The second tranche is due at the 12-month anniversary of closing (November 15, 2025).
5. Section 338(h)(10) Election. IRS Forms 8023 and 8883 are to be prepared and filed in accordance with the Election Agreement.
6. Trademark License-Back. The 3-year royalty-free license to Aurelius for use of the "Meridian" name on its streaming platform is now in effect.
Calderwood & Harkness LLP will circulate a comprehensive closing memorandum and post-closing obligations tracker to the Aurelius team in the coming days.
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Congratulations to all parties on the successful completion of this transaction. I would like to extend our sincere thanks to the working teams on both sides — Hathaway, Locke & Barnett LLP, Haverford Whitmore & Co., Drummond Zanthor Partners LLC, Granite Trust Company, N.A., Clearwater National Bank, N.A., and the Aurelius and Pinnacle Ridge business teams — for their considerable efforts in bringing this matter to a close.
We remain available for any questions regarding post-closing matters. Please do not hesitate to reach out.
Calderwood & Harkness LLP Matter No. 1043-00002
Best regards,
Beatrice Holloway Partner, Mergers & Acquisitions Calderwood & Harkness LLP 425 Park Avenue New York, NY 10022 Tel: (212) 455-7200 Email: bholloway@calderwoodharkness.com