Related Party Transactions

9 Months Ended

Sep. 30, 2014

Related Party Transaction, Due from (to) Related Party [Abstract]

Related Party Transactions

Related Party Transactions

The acquisition and recapitalization of ViSalus by the Company involves related parties.  ViSalus was owned in part by Ropart Asset Management Fund, LLC and related entities (collectively, “RAM”), which owned a significant non-controlling interest in ViSalus at the time of acquisition and through September 2012. In September 2012, RAM distributed its interest in ViSalus to its members, including Robert B. Goergen (our executive Chairman of the Board of Directors), Robert B. Goergen, Jr. (our President and Chief Executive Officer) and Todd A. Goergen (the Chief Operating Officer and interim Chief Financial Officer of ViSalus). Robert B. Goergen beneficially owns approximately 36.0% of the Company’s outstanding common stock, and together with members of his family, owns substantially all of RAM.  Todd A. Goergen is currently a member of the Board of Directors of ViSalus and was a member of the board of ViSalus at the time of the acquisition and recapitalization.

Revolving Loan Agreement with ViSalus. In connection with the ViSalus recapitalization, the Company agreed to make available to ViSalus a $6.0 million revolving credit facility. On October 17, 2014, the founders of ViSalus and Robert B. Goergen (the “Founder Lenders”) entered into a substantially similar loan agreement with ViSalus (the “Founder Revolving Loan Agreement”) pursuant to which they made a revolving credit facility available to ViSalus in an amount up to $6.0 million on terms that are substantially identical to the terms of the Blyth Revolving Loan Agreement. Loans made under the Blyth Revolving Loan Agreement and loans made under the Founder Revolving Loan Agreement will be made at the same time in equal amounts and will rank equally with each other. The revolving loan involves related parties. Robert B. Goergen, Robert B. Goergen, Jr. and Todd A. Goergen own 8.29%, 0.34% and 2.81%, respectively, of the outstanding capital stock of ViSalus.

Management and Transition Services with ViSalus. In July 2012, ViSalus and the Company entered into a management services agreement under which the Company provided certain administrative support services to ViSalus for what was believed to be an arm's length price for such services. The basis for determining the price for the services under the management services agreement was on a cost recovery basis and required ViSalus to pay for such services within 30 days of receipt of the invoice. In connection with the recapitalization of ViSalus in September 2014, Blyth and ViSalus entered into a new transition services agreement pursuant to which Blyth agreed to provide certain transition services to ViSalus, including, general administrative services, certain business support services, payroll services and maintenance of certain insurance policies and employee benefit programs. Transition services will be provided for terms that vary by service and are generally considered sufficient to allow ViSalus to arrange for such services on its own behalf following the recapitalization. The transition services will be provided at a fee that is 6% greater than the Company’s actual, out-of-pocket expenses in providing the applicable transition service. The estimated total cost of services to be provided in 2014 under both the management and transition services agreements is

$0.8 million.

RAM Sublease. For the nine months ended September 30, 2014 and 2013, RAM paid the Company $0.1 million, respectively, to sublet office space, which the Company believes approximates the fair market rental for the rental period.