Biote Resolves Founder Dispute Through Stock Buyback Program

Biotech firm BTMD to acquire 18.4 million shares from founder at $4.17 per unit, concluding lengthy legal battle

Biote Corp (NASDAQ: BTMD) has reached a definitive agreement to buy back all shares held by company founder Dr. Gary S. Donovitz, marking the end of a protracted legal dispute. The transaction values the founder’s total stake at approximately $76.9 million, with repurchases scheduled across a three-year timeline.

The settlement framework covers multiple asset classes, including Class A common shares, Holdings Units, and Class V common stock—all priced uniformly at $4.17 per share. This unified pricing structure simplifies execution and provides transparency to shareholders monitoring the company’s capital allocation decisions.

Key Milestones in the Share Buyback Schedule

The repurchase plan unfolded in four distinct phases. The initial tranche closed on April 26, 2024, when Biote acquired approximately 5.1 million Class A Shares and 3.1 million Paired Interests for $32.2 million.

Subsequent acquisitions follow an annual schedule: one year from closing, the company will purchase roughly 4.1 million Paired Interests for $15.1 million. At the two-year mark, an additional 4.1 million Paired Interests will transfer for $19.1 million. The final installment—approximately 2.0 million Paired Interests valued at $10.5 million—concludes the agreement on the third anniversary of closing.

Strategic Rationale Behind the Lawsuit Resolution

CEO Terry Weber emphasized that resolving the founder litigation positions Biote to concentrate on core growth initiatives. “This settlement eliminates prolonged legal expenses and uncertainty,” Weber stated, highlighting the company’s robust cash generation and capital reserves as enabling factors for the multi-year repurchase strategy.

The agreement includes customary protective measures: a two-year non-compete clause, non-solicitation restrictions, and voting agreement terms favorable to the company. These provisions ensure the founder’s departure doesn’t disrupt business continuity or competitive advantage.

What This Means for Shareholders

Management believes the share buyback will create accretive value over time, though specific financial impacts remain pending. The company plans to discuss earnings implications during first quarter results on May 7, 2024, providing additional context around dilution effects and capital structure changes resulting from the Biote lawsuit resolution.

The settlement reflects a pragmatic exit strategy—allowing the founder to liquidate his 18.4 million shares through a structured process while granting the company predictability in capital deployment.