Item 8.01. Other Events.
As previously disclosed, on
Since the filing of the Preliminary Proxy Statement, four complaints have been
filed in federal courts in
Altra believes that the claims asserted in the Litigation Matters are without merit and no additional disclosures are required under applicable laws. However, in order to avoid the risk of the Litigation Matters delaying or adversely affecting the Merger and to minimize the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing, Altra has determined to voluntarily make the following supplemental disclosures to the Proxy Statement, as described in this Current Report on Form 8-K. Nothing in this Current Report on Form 8-K shall be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein. To the contrary, Altra specifically denies all allegations in the Litigation Matters that any additional disclosure was or is required.
These supplemental disclosures will not change the consideration to be paid to
Altra stockholders in connection with the Merger or the timing of the special
meeting of Altra stockholders (the "Special Meeting") to be held virtually via
live webcast on
Supplemental Disclosures to the Proxy Statement in Connection with the
Litigation Matters
The following disclosures in this Current Report on Form 8-K supplement the disclosures contained in the Proxy Statement and should be read in conjunction with the disclosures contained in the Proxy Statement, which in turn should be read in its entirety. All page references are to the Proxy Statement and terms used below, unless otherwise defined, shall have the meanings ascribed to such terms in the Proxy Statement.
The disclosure in the section entitled "Proposal 1: Adoption Of The Merger Agreement-Opinion of Goldman Sachs", beginning on page 46 of the Proxy Statement, is hereby amended as follows:
The first full paragraph on page 49 is amended and supplemented as follows (with new text underlined and in bold):
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Goldman Sachs derived ranges of illustrative enterprise values for the Company
by adding the ranges of present values it derived above. Goldman Sachs then
subtracted from the range of illustrative enterprise values it derived for the
Company the adjusted net debt of
The second full paragraph on page 49 is amended and supplemented as follows (with new text underlined and in bold):
Illustrative Present Value of Future Share Price Analysis. Goldman Sachs
performed an illustrative analysis of the implied present value of an
illustrative future value per Share, which is designed to provide an indication
of the present value of a theoretical future value of the Company's equity as a
function of the Company's next twelve months ("NTM") EV/EBITDA multiples. For
this analysis, Goldman Sachs used the Management Forecasts for each of the
fiscal years 2023, 2024 and 2025. Goldman Sachs first calculated the implied
enterprise values of the Company as of
The third full paragraph on page 49, and first and second full paragraphs on page 50 are amended and supplemented as follows (with new text underlined and in bold, and deleted text marked with a strikethrough):
Selected Transactions Analysis. Goldman Sachs analyzed certain information relating to the following selected transactions in the motion control industry since 2013.
For each of the selected transactions where information was publicly available, Goldman Sachs calculated and compared the implied EV/LTM EBITDA multiple of the applicable target company based on the total consideration paid in the transaction as a multiple of the target company's LTM EBITDA based on publicly available information at the time each selected transaction was announced. While none of the target companies that participated in the selected transactions are directly comparable to the Company, the target companies that participated in the selected transactions are companies with operations, results, market sizes and product profiles that, for the purposes of analysis, may be considered similar to certain of the Company's operations, results, market size and product profile.
The following table presents the results of this analysis:
Selected Precedent Transactions
Announcement Date Acquiror Target EV/LTM Enterprise EBITDA Value (in billions) ($) July 2021 RBC Bearings ABB Ltd.'s DODGE Mechanical 16.7x 2.9 Incorporated Power Transmission Business February 2021 Regal Beloit Rexnord Corporation's Process 14.2x 3.7 Corporation & Motion Control Segment
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January 2020 Danfoss Eaton's Hydraulics Business 13.2x 3.3 March 2018 Altra Fortive Corporation's 13.6x 3.0 Industrial Automation & Specialty Motion Corp. Platform August 2016 Nidec Emerson Electric Co.'s Motors, 6.9x 1.2 Corporation Drives and Electric Power Generation Businesses March 2015 RBC Bearings Dover Corporation's Sargent 13.3x 0.5 Incorporated Aerospace & Defense Business December 2014 Regal Beloit Emerson Electric Co.'s Power 11.8x 1.4 Corporation Transmission Solutions Business April 2014 Blackstone Gates Corporation 9.6x 5.4 September 2013 SKF Kaydon Corporation 12.7x 1.3 Median 13.2x
The disclosure in the section entitled "Proposal 1: Adoption Of The Merger Agreement-Certain Financial Forecasts", beginning on page 52 of the Proxy Statement, is hereby amended as follows:
The following is inserted as a new paragraph after the second sentence of the section:
The following table summarizes the preliminary non-public, unaudited prospective
financial information provided by senior management of the Company to Goldman
Sachs for purposes of the preliminary financial analysis that it presented to
the Board on
Preliminary Management Forecasts Fiscal Year Ending December 31 (Amounts in $Millions) Q3 - Q4 2023E 2024E 2025E 2026E 2022E Revenue$ 950 $ 2,003 $ 2,103 $ 2,208 $ 2,307 Adj. EBITDA(1) 199 427 476 524 567
Unlevered Free Cash Flow(2) 139 288 315 351 385
(1)
"Adj. EBITDA" is defined as earnings before interest, taxes, depreciation, acquisition-related amortization, acquisition-related costs, restructuring costs, stock-based compensation, asset impairment and other income or charges that management does not consider to be directly related to the Company's core operating performance. Adj. EBITDA is a non-GAAP financial measure and should not be considered as an alternative to net income or operating income as a measure of operating performance or cash flows or as a measure of liquidity.
(2)
"Unlevered Free Cash Flow" is defined as Adj. EBITDA less unlevered taxes, less capital expenditures less (plus) increase (decrease) in net working capital, less stock-based compensation, plus deferred taxes. Unlevered Free Cash Flow is a non-GAAP financial measure and should not be considered as an alternative to net income or operating income as a measure of operating performance or cash flows or as a measure of liquidity.
Cautionary Statement Regarding Forward-Looking Statements
This communication contains forward looking statements, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Altra intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions, which reflect Altra's current estimates, expectations and projections about Altra's future results, performance, prospects and opportunities. Forward-looking statements include, among other things, the information concerning Altra's possible future results of operations including revenue, costs of goods sold, gross margin, future profitability, future economic improvement, business and growth strategies, financing plans, expected leverage levels, Altra's competitive position and the effects of competition, the projected growth of the industries in which we operate, Altra's ability to consummate the Merger and other strategic transactions on the expected timeline or at all and Altra's expectations regarding the Special Meeting. Forward-looking statements include statements that are not historical facts and can be identified by forward-looking words such as "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "intend", "plan", "may", "project", "should", "will", "would", and similar expressions or variations. These forward-looking statements are based upon information currently available to Altra and are subject to a number of risks, uncertainties, and other factors that could cause Altra's actual results,
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performance, prospects, or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:
•
the Merger may not be completed in a timely manner or at all, including the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect Altra or the expected benefits of the Merger or that the approval of Altra stockholders is not obtained;
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the ability of Parent to obtain debt financing in connection with the Merger;
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the possibility that any or all of the various conditions to the consummation of the Merger may not be satisfied or waived, including the failure to receive any required regulatory approvals from any applicable governmental entities (or any conditions, limitations or restrictions placed on such approvals);
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the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger, including in circumstances which would require Altra to pay a termination fee or other expenses;
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the effect of the announcement or pendency of the Merger on Altra's ability to retain and hire key personnel, its ability to maintain relationships with its customers, suppliers, distributors and others with whom it does business, or its operating results and business generally;
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risks related to the Merger and related transactions diverting management's attention from Altra's ongoing business operations;
•
the risk that shareholder litigation in connection with the Merger may result in significant costs of defense, indemnification and liability; and
•
other factors discussed in the "Risk Factors" and the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" sections of
Altra's Annual Report on Form 10-K for the fiscal year ended
In addition to the risks described above, other unknown or unpredictable factors also could affect Altra's results. As a result of these factors, we cannot assure you that the forward-looking statements in this communication will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame, or at all. The forward-looking statements in this communication represent our views as of the date of this communication. We anticipate that subsequent events and developments may cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this communication. You should read this communication and the documents that we reference in this communication completely and with the understanding that our actual future results may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements.
Participants in the Solicitation
Altra and its directors and executive officers may be deemed to be participants
in the solicitation of proxies from Altra's stockholders in connection with the
Merger. Information about the directors and executive officers of Altra is set
forth in its proxy statement for its 2022 annual meeting of stockholders on
Schedule 14A filed with the
Additional Information and Where to Find It
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or constitute a solicitation of any vote or approval.
In connection with the Merger, Altra filed the Proxy Statement with the
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CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE MERGER. Any vote in respect of resolutions to be proposed
at the Special Meeting to approve the Merger or other responses to the Merger
should be made only on the basis of the information contained in the Proxy
Statement. Stockholders will be able to obtain free copies of the documents
containing important information about Altra (if and when available) through the
website maintained by the
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