Item 1.01 Entry into Material Definitive Agreements.
Merger Agreement
On January 25, 2021, ION Acquisition Corp. 1 Ltd., a Cayman Islands exempted
company ("ION"), entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Taboola.com Ltd., a company organized under the laws of the
State of Israel ("Taboola"), and Toronto Sub Ltd., a Cayman Islands exempted
company and a direct, wholly-owned subsidiary of Taboola ("Merger Sub").
Pursuant to the Merger Agreement and subject to the terms and conditions set
forth therein, Merger Sub will merge with and into ION (the "Merger"), with ION
continuing as the surviving company after the Merger (the "Surviving Company").
As a result of the Merger and the other transactions contemplated by the Merger
Agreement (the "Transactions" or the "Business Combination"), ION will become a
direct, wholly-owned subsidiary of Taboola. The Merger Agreement and the
Transactions were unanimously approved by the board of directors of each of ION
and Taboola.
Immediately prior to the effective time of the Merger (the "Effective Time"),
(i) each preferred share, with no par value, of Taboola (each, a "Taboola
Preferred Share") will be converted into ordinary shares, with no par value, of
Taboola (each, a "Taboola Ordinary Share") in accordance with Taboola's
organizational documents and (ii) immediately following such conversion but
prior to the Effective Time, Taboola will effect a stock split of each Taboola
Ordinary Share into such number of Taboola Ordinary Shares calculated in
accordance with the terms of the Merger Agreement such that each Taboola
Ordinary Share will have a value of $10.00 per share after giving effect to such
stock split (the "Stock Split" and, together with the conversion of Taboola
Preferred Shares, the "Capital Restructuring").
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Pursuant to the Merger Agreement, immediately prior to the Effective Time, each
(i) Class B ordinary share, par value $0.0001 per share, of ION ("ION Class B
Shares") will be automatically converted into one (1) Class A ordinary share,
par value $0.0001 per share, of ION ("ION Class A Shares") in accordance with
the terms of ION's organizational documents and, after giving effect to such
automatic conversion, at the Effective Time and as a result of the Merger, each
issued and outstanding ION Class A Share will no longer be outstanding and will
automatically be converted into the right of the holder thereof to receive one
Taboola Ordinary Share after giving effect to the Capital Restructuring and (ii)
issued and outstanding warrant of ION sold to the public and to ION's sponsors
in a private placement in connection with ION's initial public offering ("ION
Warrants") will automatically and irrevocably be assumed by Taboola and
converted into a corresponding warrant for Taboola Ordinary Shares ("Taboola
Warrants") exercisable for Taboola Ordinary Shares. Immediately prior to the
Effective Time, the ION Class A Shares and the public ION Warrants comprising
each issued and outstanding ION unit, consisting of one (1) ION Class A Share
and one-fifth (1/5th) of one (1) public ION Warrant, will be automatically
separated and the holder thereof will be deemed to hold one (1) ION Class A
Share and one-fifth (1/5th) of one (1) public ION Warrant. No fractional public
ION Warrants will be issued in connection with such separation such that if a
holder of such ION units would be entitled to receive a fractional public ION
warrant upon such separation, the number of public ION warrants to be issued to
such holder upon such separation will be rounded down to the nearest whole
number of public ION Warrants.
The Transactions are targeted to be consummated in the second quarter of 2021,
after receipt of the required approval by the shareholders of Taboola (the
"Taboola Shareholder Approval"), the required approval by Taboola in its
capacity as the sole shareholder of Merger Sub (the "Merger Sub Shareholder
Approval"), and the required approval by the shareholders of ION (the "ION
Shareholder Approval") and the fulfillment of certain other conditions set forth
in the Merger Agreement.
Representations and Warranties
The Merger Agreement contains representations and warranties of Taboola and its
subsidiaries, including Merger Sub, relating, among other things, to proper
organization and qualification; Taboola's subsidiaries; capitalization; the
authorization, performance and enforceability against Taboola of the Merger
Agreement and the requisite shareholder approval; absence of conflicts;
governmental consents and filings; compliance with laws and possession of
requisite governmental permits, approvals and orders; financial statements;
absence of undisclosed liabilities; absence of certain changes; litigation;
employee benefits; labor relations; real and tangible property; tax matters;
environmental matters; broker's fees; intellectual property; privacy and data
security; material contracts; insurance; transactions with affiliates; supplied
information; absence of certain business practices; and the PIPE Investment (as
defined below).
The Merger Agreement contains representations and warranties of ION, relating,
among other things, to proper organization and qualification; ION's
subsidiaries; capitalization; the authorization, performance and enforceability
against ION of the Merger Agreement; absence of conflicts; required consents and
filings; compliance with laws and possession of requisite governmental permits,
approvals and orders; reports filed with the Securities and Exchange Commission
("SEC"), financial statements, and compliance with the Sarbanes-Oxley Act;
absence of certain changes; litigation; business activities; material contracts;
New York Stock Exchange ("NYSE") listing; absence of undisclosed liabilities;
ION's trust account; tax matters; supplied information; employee benefits; board
approval and the requisite shareholder approval; title to assets; transactions
with affiliates; status under the Investment Company Act of 1940, as amended,
and the Jumpstart Our Business Startups Act of 2012; and broker's fees.
The representations and warranties made in the Merger Agreement will not survive
the consummation of the Merger.
Covenants
The Merger Agreement includes customary covenants of the parties with respect to
efforts to satisfy conditions to the consummation of the Transactions. The
Merger Agreement also contains additional covenants of the parties, including,
among others, a covenant providing for ION and Taboola to cooperate in the
preparation of the Registration Statement on Form F-4 required to be prepared in
connection with the Merger (the "Registration Statement"), covenants requiring
ION and Taboola to establish a record date for, duly call and give notice of,
convene and hold an extraordinary general meeting of ION's shareholders and a
general meeting of Taboola's shareholders, respectively, as promptly as
practicable following the date that the Registration Statement is declared
effective by the SEC under the Securities Act of 1933, as amended (the
"Securities Act"), covenants requiring the board of directors of ION and the
board of directors of Taboola to recommend to the shareholders of ION or
Taboola, as applicable, the adoption and approval of the ION or Taboola
transaction proposals contemplated by the Merger Agreement and covenants
prohibiting ION and Taboola from, among other things, directly or indirectly
soliciting, initiating, entering into or continuing discussions, negotiations or
transactions with, or encouraging or responding to any inquiries or proposals
by, or providing any information to, any person concerning, any alternative
business combination. The board of directors of ION would be entitled to change
its recommendation to ION's shareholders under certain circumstances unrelated
to an alternative business combination, including after compliance with certain
matching right procedures.
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Conditions to Closing
In addition, the consummation of the Transactions is conditioned upon, among
other things:
? receipt of the Taboola Shareholder Approval, the Merger Sub Shareholder
Approval and the ION Shareholder Approval;
? ION having at least $5,000,001 of net tangible assets immediately after giving
effect to the ION Shareholder Redemption upon the Closing;
? the absence of any provision of any applicable legal requirement and any
temporary, preliminary or permanent restraining order prohibiting, enjoining or
making illegal the consummation of the Transactions;
? the approval for listing of Taboola Ordinary Shares and Taboola Warrants to be
issued in connection with the Closing upon the Closing on the NYSE, subject
only to official notice of issuance thereof;
? effectiveness of the Registration Statement in accordance with the provisions
of the Securities Act, the absence of any stop order issued by the SEC which
remains in effect with respect to the Registration Statement, and the absence
of any proceeding seeking such a stop order having been threatened or initiated
by the SEC which remains pending;
? completion by Taboola of the Capital Restructuring in accordance with the terms
of the Merger Agreement and Taboola's organizational documents; and
? receipt of a required ruling issued by the Israel Tax Authority pursuant to
Section 104H of the Israeli Income Tax Ordinance (the "104H Tax Ruling").
The obligations of Taboola and Merger Sub to consummate the Transactions are
also conditioned upon, among other things:
. . .
Item 7.01 Regulation FD Disclosure.
On January 25, 2021, Taboola issued a press release announcing that it has
executed the Merger Agreement. A copy of the press release is furnished hereto
as Exhibit 99.1.
Furnished as Exhibit 99.2 hereto is an investor presentation, dated January
2021, prepared by Taboola and ION regarding the Business Combination and
presented in connection with the marketing of the PIPE Investment. A copy of the
transcript of a pre-recorded investor presentation to be provided on January 25,
2021 is furnished as Exhibit 99.3 hereto.
The information in this Item 7.01 and Exhibits 99.1, 99.2 and 99.3 attached
hereto shall not be deemed "filed" for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to
liabilities under that section, and shall not be deemed to be incorporated by
reference into the filings of ION under the Securities Act or the Exchange Act,
regardless of any general incorporation language in such filings. This Current
Report on Form 8-K will not be deemed an admission as to the materiality of any
information in this Item 7.01 and Exhibits 99.1, 99.2 and 99.3 attached hereto.
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Important Information About the Business Combination and Where to Find It
In connection with the proposed Business Combination, Taboola intends to file
with the SEC the Registration Statement which will include a proxy
statement/prospectus and certain other related documents, which will include
both the proxy statement to be distributed to holders of shares of ION Class A
Shares in connection with ION's solicitation of proxies for the vote by ION's
shareholders with respect to the Business Combination and other matters as may
be described in the Registration Statement, as well as the prospectus relating
to the offer and sale of the securities of Taboola to be issued in the Business
Combination. ION's shareholders and other interested persons are advised to
read, when available, the preliminary proxy statement/prospectus included in the
Registration Statement and the amendments thereto and the definitive proxy
statement/prospectus, as these materials will contain important information
about Taboola, ION and the Business Combination. After the Registration
Statement is declared effective, the definitive proxy statement/prospectus will
be mailed to shareholders of ION as of a record date to be established for
voting on the Business Combination and other matters as may be described in the
Registration Statement. Shareholders of ION will also be able to obtain copies
of the proxy statement/prospectus and other documents filed with the SEC that
may be incorporated by reference therein, without charge, once available, at the
SEC's web site at www.sec.gov, or by directing a request to: ION Acquisition
Corp 1 Ltd., 89 Medinat Hayehudim Street, Herzliya 4676672, Israel, Attention:
Secretary, +972 (9) 970-3620.
Participants in the Solicitation
ION and its directors and executive officers may be deemed participants in the
solicitation of proxies from ION's shareholders with respect to the Business
Combination. A list of the names of those directors and executive officers and a
description of their interests in ION is contained in ION's registration
statement on Form S-1, which was filed with the SEC on October 1, 2020 and is
available free of charge at the SEC's website at www.sec.gov, or by directing a
request to ION Acquisition Corp 1 Ltd., 89 Medinat Hayehudim Street, Herzliya
4676672, Israel, Attention: Secretary, +972 (9) 970-3620. Additional information
regarding the interests of such participants will be contained in the
Registration Statement when available.
Taboola and its directors and executive officers may also be deemed to be
participants in the solicitation of proxies from the shareholders of ION in
connection with the Business Combination. A list of the names of such directors
and executive officers and information regarding their interests in the Business
Combination will be contained in the Registration Statement when available.
Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. ION's and Taboola's actual results may differ from their
expectations, estimates and projections and consequently, you should not rely on
these forward looking statements as predictions of future events. Words such as
"expect," "estimate," "project," "budget," "forecast," "anticipate," "intend,"
"plan," "may," "will," "could," "should," "believes," "predicts," "potential,"
"continue," and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements include, without
limitation, ION's and Taboola's expectations with respect to future performance
and anticipated financial impacts of the Business Combination, the satisfaction
of the closing conditions to the Business Combination, and the timing of the
completion of the Business Combination. These forward-looking statements involve
significant risks and uncertainties that could cause the actual results to
differ materially from the expected results. Most of these factors are outside
ION's and Taboola's control and are difficult to predict. Factors that may cause
such differences include, but are not limited to: (1) the occurrence of any
event, change or other circumstances that could give rise to the termination of
the Merger Agreement or could otherwise cause the Business Combination to fail
to close; (2) the outcome of legal proceedings that have or may be instituted
against ION and Taboola; (3) the inability to complete the Business Combination,
including due to failure to obtain the requisite approval of shareholders or
other conditions to closing in the Merger Agreement; (4) the receipt of an
unsolicited offer from another party for an alternative business transaction
that could interfere with the Business Combination; (5) the inability to obtain
or maintain the listing of the ordinary shares of the post-acquisition company
on The New York Stock Exchange following the Business Combination; (6) the risk
that the announcement and consummation of the Business Combination disrupts
current plans and operations; (7) the ability to recognize the anticipated
benefits of the Business Combination, which may be affected by, among other
things, competition, the ability of the combined company to grow and manage
growth profitably and retain its key employees; (8) costs related to the
Business Combination; (9) changes in applicable laws or regulations; (10) the
possibility that Taboola or the combined company may be adversely affected by
other economic, business, competitive and/or factors such as the COVID-19
pandemic; and (11) other risks and uncertainties indicated from time to time in
the proxy statement/prospectus relating to the Business Combination, including
those under "Risk Factors" in the Registration Statement, and in ION's other
filings with the SEC. ION cautions that the foregoing list of factors is not
exclusive. ION cautions readers not to place undue reliance upon any
forward-looking statements, which speak only as of the date made. ION does not
undertake or accept any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements to reflect any change in
its expectations or any change in events, conditions or circumstances on which
any such statement is based.
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No Offer or Solicitation
This Current Report on Form 8-K shall not constitute a solicitation of a proxy,
consent or authorization with respect to any securities or in respect of the
Business Combination. This Current Report on Form 8-K shall also not constitute
an offer to sell or the solicitation of an offer to buy any securities, nor
shall there be any sale of securities in any states or jurisdictions in which
such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting the
requirements of section 10 of the Securities Act, or an exemption therefrom.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
99.1 Press Release, dated January 25, 2021
99.2 Investor Presentation, dated January 2021
99.3 Transcript of Investor Presentation
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