Avanos Medical Executive Receives $25 Per Share Cash Consideration in Completed Merger Transaction

Merger Consideration Structure and Share Conversion

The merger agreement, which was dated April 13, 2026, established a fixed cash consideration of $25.00 per share for all common stock holders. According to the disclosure filing, each share of Avanos Medical's common stock that was issued and outstanding immediately prior to the merger's effective time on July 27, 2026, was converted into and exchanged for this cash payment, without interest. The cash payments were made in accordance with the terms and conditions set forth in the merger agreement between Avanos Medical, A-AV Holdco I, Inc., a Delaware corporation, and A-AV MergerSub, Inc., which served as a wholly-owned subsidiary of the parent entity.

The immediate share price impact was not clear from available public information. Investors evaluating the transaction's fairness relative to pre-announcement trading levels would need to consult historical stock price data and contemporaneous public announcements. The filing confirms only that the cash consideration was fixed at $25.00 per share and that the transaction closed on the stated date.

Treatment of Time-Based Restricted Stock Units

Time-based restricted stock units held by Sigfrido Delgado were converted into cash payments as part of the merger consideration. The filing states that the executive held 40,335 restricted stock units that were subject to only time-based vesting conditions. These units were canceled immediately prior to the merger's effective time and converted into the right to receive a cash amount determined by multiplying the $25.00 merger consideration by the number of shares of common stock the executive would have been entitled to receive if such units had vested in full, with applicable tax withholdings deducted from the payment.

This treatment ensured that holders of time-based equity awards received economic consideration equivalent to what they would have received had their vesting schedules continued through the merger date. The conversion approach provided certainty regarding payment amounts and timing, allowing affected employees and executives to know precisely what cash they would receive from this component of their equity holdings.

Conversion of Performance-Based Equity Awards

Performance-based restricted stock units held by Delgado received special treatment under the merger agreement. The filing indicates that 54,886 shares of common stock were reported as acquired through the deemed exercise of performance-based units. These performance-based restricted stock units were canceled immediately prior to the merger's effective time and converted into cash payments based on a formula that considered vesting status and performance achievement.

The conversion methodology established three distinct treatment pathways depending on the performance period status. For any one-year performance period that had been completed prior to the merger's effective time, actual performance against the established metrics determined the payout. For any one-year performance period that was in progress as of the merger's effective time, the greater of actual achievement or the target level applied, though the filing notes these awards were converted at target level with a potential true-up adjustment. For any one-year performance period that had not yet commenced as of the merger's effective time, deemed achievement at target level determined the payout.

Potential True-Up Payment for Fiscal Year 2026 Performance

The filing discloses that the amount reported for performance-based units represents the aggregate number of such units paid out to Delgado at or within 15 business days following the merger's effective time based on target performance for fiscal year 2026. However, the document notes an important contingency: in the event that actual performance for fiscal year 2026 exceeds the target level, the reporting person will receive an additional true-up payment to reflect the higher achievement level.

The disclosure specifies that the maximum aggregate number of performance-based units that Delgado could earn based on actual performance for fiscal year 2026 is 72,282 shares' worth of value. This structure created a mechanism for executives to receive additional consideration if the company's performance against established metrics exceeded the target threshold used for initial payout calculations. The potential true-up payment represents additional compensation exposure that may be realized after the merger closes, contingent on performance results.

Treatment of Outstanding Employee Stock Options

Two separate groups of employee stock options held by Delgado received cash consideration upon the merger's completion. The first group consisted of options with an exercise price of $13.69 per share, representing 37,520 options. These options were originally scheduled to vest 30 percent on March 13, 2027, 30 percent on March 13, 2028, and 40 percent on March 13, 2029, with an expiration date of March 13, 2036. The second group consisted of options with an exercise price of $15.24 per share, representing 21,914 options, which were originally scheduled to vest in similar tranches on March 7, 2026, March 7, 2027, and March 7, 2028, with expiration on March 7, 2035.

Both groups of options were canceled immediately prior to the merger's effective time and converted into cash payments. The conversion formula multiplied the excess of the $25.00 merger consideration minus the applicable exercise price by the number of shares the executive would have been entitled to receive upon exercise if the stock option awards had vested in full, with applicable tax withholdings deducted. This approach ensured that employees holding in-the-money options received the intrinsic value of their equity grants, while options with exercise prices exceeding the merger consideration were canceled for no consideration.

Merger Agreement Parties and Structure

The merger transaction involved three primary entities as specified in the disclosure filing. Avanos Medical, Inc. served as the target company being acquired. A-AV Holdco I, Inc., a Delaware corporation, acted as the parent company in the transaction structure. A-AV MergerSub, Inc., also a Delaware corporation and a wholly-owned subsidiary of the parent entity, served as the merger subsidiary that was merged with and into Avanos Medical, with Avanos Medical continuing as the surviving entity.

The merger agreement dated April 13, 2026, established the framework and terms governing the transaction, including the consideration amounts, conversion formulas for various equity instruments, conditions to closing, and other customary merger agreement provisions. The document notes that the merger agreement could be amended, supplemented, waived, or otherwise modified in accordance with its terms prior to or at the effective time of the merger.

Executive Position and Reporting Obligations

Sigfrido Delgado, identified in the filing as Senior Vice President of Operations for Avanos Medical, submitted this disclosure in his capacity as an officer of the company subject to Section 16 reporting obligations under the Securities Exchange Act of 1934. The filing was submitted on July 28, 2026, one business day after the merger's effective date, indicating the timing requirements for insiders to report transactions affecting their beneficial ownership of company securities.

The disclosure indicates that Delgado held significant equity stakes in the company across multiple instrument types, including direct common stock holdings, restricted stock units subject to time-based vesting, performance-based restricted stock units, and employee stock options. The aggregate impact of the merger on Delgado's equity compensation package involved the conversion of all these instruments into cash payments calculated according to the formulas and methodologies specified in the merger agreement.

Tax Withholding and Net Payment Considerations

The filing references applicable tax withholdings across multiple categories of equity conversions. For time-based restricted stock units, the cash payment calculation involved multiplying the merger consideration by the number of shares that would have vested, less applicable tax withholdings. Similarly, for performance-based units and employee stock options, the conversion formulas specified that resulting cash payments would be reduced by applicable tax withholdings before delivery to the executive.

The specific tax withholding amounts and methodologies were not disclosed in this filing. Executives and employees receiving merger consideration from various equity instruments would need to consult with tax advisors regarding the timing of withholding payments, the tax characterization of different payment components, and any required estimated tax payments or adjustments. The filing establishes only that tax withholdings would apply to the gross conversion amounts without specifying rates or actual dollar amounts.

Completion of Merger and Post-Closing Matters

The merger became effective on July 27, 2026, marking the completion of the transaction and the conversion of all Avanos Medical equity instruments into cash payments. The filing was submitted the following business day on July 28, 2026, by John Fischer, acting as attorney-in-fact for Sigfrido Delgado, fulfilling the insider reporting requirements triggered by the change in beneficial ownership status resulting from the merger.

The disclosure confirms that performance-based restricted stock unit payments at target level were made at or within 15 business days following the merger's effective time, establishing a defined payment schedule for at least this category of equity compensation. Employees and executives should monitor their compensation records and bank accounts during this window to verify receipt of expected merger consideration payments. The potential true-up payment mechanism for performance-based units may extend this timeline further, depending on when fiscal year 2026 performance results are finalized and calculated.