Preventive healthcare provider Biote announced it has signed a binding term sheet with Dr. Gary S. Donovitz (“Donovitz”), founder and stockholder of Biote, to resolve outstanding litigation. Donovitz, who founded the company in 2012, had accused executives he hired of hijacking the company and diluting his ownership by nearly $220 million.
Biote went public in May 2022 via a merger with Haymaker Acquisition III.
Under the terms of the settlement, Biote will repurchase all of the approximately 5.1 million Class A Shares and the approximately 13.3 million Paired Interests beneficially owned by Donovitz for approximately $76.9 million in the aggregate. The average price for each repurchased Paired Interest or Class A Share will be $4.17 per share and will occur over a three-year schedule.
The settlement agreement to be entered into between Biote and Donovitz will include: a mutual release of all claims relating to litigation between Donovitz and Biote; the termination of the founder advisory agreement by and between Donovitz and BioTE Medical, two-year non-compete and non-solicitation agreements for Donovitz; and the negotiation of and entry into a voting agreement with customary terms acceptable to the company.
