8-K: Acme United Acquires My Medic Assets for $18.7M

Acme United Corporation has completed the acquisition of SLED Distribution, LLC, operating as My Medic, a leading supplier of tactical, trauma, and emergency response products, for a maximum purchase price of $18.7 million.

Summary

• Acme United Corporation acquired substantially all of the assets of SLED Distribution, LLC d/b/a "My Medic" and Rapid Medical, LLC, collectively referred to as the Sellers.
• My Medic is a leading supplier of tactical, trauma, and emergency response products, primarily in the direct-to-consumer channel.
• The acquired business encompasses the manufacturing, marketing, and selling of emergency and first aid kits, medical packs, tourniquets, and related products.
• The maximum purchase price for the Purchased Assets is $18.7 million.
• At closing, $14.6 million was paid in cash to the Sellers.
• The remaining $4.1 million of the purchase price is subject to contingencies: $1.0 million is contingent upon achieving certain revenue milestones during the twelve months ended December 31, 2027, and $3.1 million is subject to a holdback for indemnification claims.
• My Medic reported revenues of approximately $19 million in 2025.
• The Net Asset Value at closing was determined to be $3,197,266.97, which was $1,311,02.03 less than the target Net Asset Value of $4,508,359.00, resulting in a corresponding decrease in the closing payment.
• Acme United intends to maintain My Medic's operations in North Salt Lake, Utah, and plans to expand its product offering and distribution in the U.S. and Canada.

Sentiment

Score: 7

Explanation: The acquisition appears strategically sound, expanding Acme United's presence in a growing market with a strong direct-to-consumer brand. The contingent payment structure and retention of key personnel are favorable. However, the reduction in the initial closing payment due to lower Net Asset Value and the general economic risks outlined temper the overall sentiment slightly.

Positives

• Acquisition of a leading supplier in the tactical, trauma, and emergency response product market, a sector with potential for growth.
• My Medic has a strong direct-to-consumer presence, an extensive library of training videos, and over 500,000 followers on social media platforms.
• The acquisition is expected to enhance My Medic's reach and value through Acme United's combined marketing, distribution, sourcing, and manufacturing capabilities.
• Key personnel from My Medic are being retained to ensure an orderly transition and continuity of the business.
• The contingent payment structure for $1.0 million aligns the sellers' incentives with future revenue growth, requiring sales to meet or exceed $22 million by December 31, 2027.

Negatives

• A significant portion of the purchase price ($4.1 million) is subject to future contingencies and holdbacks, introducing uncertainty regarding the final payout to sellers.
• The closing payment was decreased by $1,311,02.03 due to the Net Asset Value of the acquired assets being lower than the agreed-upon target.
• Sellers remain responsible for certain excluded liabilities, pre-closing operations, and pre-closing taxes, which could lead to future indemnification claims against the holdback amount.
• Portions of the Asset Purchase Agreement have been redacted for confidential treatment, limiting full public transparency of certain details.

Risks

• Uncertainties in global economic conditions, which could impact suppliers and customers.
• Changes in international trade policies, including the imposition of new tariffs or changes in existing tariff rates by the United States or foreign governments.
• The continuing adverse impact of inflation, including product costs, and interest rates.
• Potential adverse effects on the company, its customers, and suppliers resulting from ongoing conflicts in Ukraine and the Middle East.
• Additional disruptions in supply chains, whether caused by pandemics, natural disasters, trucker shortages, strikes, port closures, or other events.
• Labor-related costs, including expenses for acquiring and training new employees and rising wages and benefits.
• Currency fluctuations affecting international operations and costs.
• The company's ability to effectively manage its inventory in a rapidly changing business environment.
• Changes in client needs and consumer spending habits.
• The impact of competition in the markets where the business operates.
• The impact of technological changes, specifically the growth of online marketing and sales activity.
• The company's ability to manage its growth effectively, including successfully integrating the acquired business.
• Failure to achieve the specified revenue milestones for the $1.0 million contingent payment.
• Potential indemnification claims against the $3.1 million holdback amount.

Future Outlook

Acme United intends to keep My Medic's operations in North Salt Lake, Utah, and plans to expand its product offering and distribution in the U.S. and Canada. Management believes the combined marketing, distribution, sourcing, and manufacturing capabilities will greatly enhance the reach and value of My Medic's life-saving products.

Management Comments

• "We are delighted to welcome the management and team of My Medic to our Company."
• "We believe the combined marketing, distribution, sourcing, and manufacturing capabilities of our two operations will greatly enhance the reach and value of My Medic's life-saving products."
• "My Medic has an extensive library of training videos and over 500,000 followers on its social media platforms. We believe its direct-to-consumer presence for trauma and emergency response products is the strongest in the United States."
• "We intend to keep My Medic's operations in North Salt Lake and to expand its product offering and distribution in the U.S. and Canada."

Industry Context

This acquisition positions Acme United in the tactical, trauma, and emergency response product market, leveraging My Medic's strong direct-to-consumer channel and social media presence. This move aligns with broader industry trends of companies seeking to expand into specialized, high-growth segments and enhance direct customer engagement, particularly in the safety and medical supplies sector.

Management Changes

Corporate Governance

Related Party Transactions

• The Owners (Devin Udy, Devin M. Udy, Trustee, Sarah Welch, Sarah Welch, Trustee, Emily Barrera, Emily Barrera, Trustee, Landon J. Udy, Landon J. Udy, Trustee, and SLED Investment Group, LLC) are members of the Sellers and will derive substantial benefit from the sale of the Purchased Assets.
• Non-Competition and Confidentiality Agreements were executed by Sellers and specific Owners (JoLynn Udy, Devin Udy, Sarah Welch, Emily Barrera, and Landon Udy), who are receiving good and valuable consideration for these agreements.

Stakeholder Impact

• Shareholders (Acme United): Potential for increased revenue and market share in the emergency response sector, leveraging My Medic's strong brand and direct-to-consumer channel. However, there are also integration risks and contingent payment obligations.
• Employees (My Medic): Key personnel are retained by Acme United, ensuring continuity. Other active employees are terminated by Sellers and immediately hired by Buyer, with Sellers responsible for pre-closing employee liabilities.
• Customers (My Medic): Expected to benefit from enhanced product offerings and distribution capabilities through Acme United's resources.
• Suppliers (My Medic): Existing supplier relationships are assumed by Acme United, ensuring continuity of supply.
• Sellers (My Medic/Rapid Medical Owners): Receive a significant cash payment at closing and have the potential for future contingent payments, subject to performance milestones and indemnification claims.

Next Steps

• Sellers are required to file an amendment to their certificate of organization changing their name to one not containing 'My Medic', 'Rapid Medical', or 'RATS' within 30 days following the Closing.
• Sellers will take actions to transfer all rights to telephone and facsimile numbers, URLs, and Uniform Product Codes used in connection with the Business to Buyer.
• Buyer will use commercially reasonable efforts to collect the Accounts Receivable.
• My Medic will assign the lease for the Business Premises to Buyer, with the consent of the landlord, within a reasonable period after the Closing.
• Sellers and Buyer will cooperate in providing information required for any returns or other documentation relating to Transfer Taxes.
• Sellers will diligently pursue payment of any and all Pre-Closing Taxes and keep Buyer reasonably apprised of filings or settlements.
• Sellers will provide support as Buyer may reasonably request for the orderly transfer of customer and supplier files and other pertinent operational data to Buyer.

Key Dates

Recommendation

Acme United's acquisition of My Medic strategically enhances its portfolio in the high-growth tactical, trauma, and emergency response sector. My Medic's strong direct-to-consumer channel and significant social media presence offer a valuable platform for expansion. The retention of key management and a performance-based earn-out component for a portion of the purchase price align seller incentives with future success and mitigate immediate financial risk. While integration challenges and broader economic uncertainties exist, the potential for synergy in marketing, distribution, and manufacturing, coupled with the expansion into new product offerings and geographies, presents a compelling growth opportunity for Acme United. The company's ability to leverage My Medic's brand and market position should drive long-term value creation.

Keywords

Acquisition, My Medic, Acme United Corporation, Emergency Response, First Aid Kits, Tactical Products, Trauma Products, Direct-to-Consumer, NYSE American: ACU, SLED Distribution, Rapid Medical, Asset Purchase