Item 8.01. Other Events
As previously disclosed and reported in the Current Report on Form 8-K filed on
September 28, 2022 with the U.S. Securities and Exchange Commission (the "SEC"),
BTRS Holdings Inc., a Delaware corporation ("Billtrust" or the "Company"),
entered into an Agreement and Plan of Merger (the "Merger Agreement"), dated as
of September 28, 2022, by and among the Company, Bullseye FinCo, Inc., a
Delaware corporation ("Parent") and Bullseye Merger Sub, Inc., a Delaware
corporation and a direct, wholly owned subsidiary of Parent ("Merger Sub"),
providing for, among other things, the merger of Merger Sub with and into the
Company (the "Merger"), with the Company surviving the Merger as a wholly owned
subsidiary of Parent. In connection with the Merger, the Company's common stock
will be delisted from the Nasdaq Global Select Market and deregistered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
On November 10, 2022, the Company filed with the SEC a definitive proxy
statement in connection with the Merger (the "Definitive Proxy Statement").
As of December 5, 2022, three complaints have been filed by purported
stockholders of Billtrust in federal court challenging the Merger, including (i)
O'Dell v. BTRS Holdings Inc., et al., Case 1:22-cv-09212, filed on October 27,
2022 in the United States District Court for the Southern District of New York;
(ii) Smith v. BTRS Holdings Inc., et al., Case 1:22-cv-09808-UA, filed on
November 17, 2022 in the United States District Court for the Southern District
of New York; and (iii) Johnson v. BTRS Holdings Inc., et al., Case
1:22-cv-01508-UNA, filed on November 18, 2022 in the United States District
Court for the District of Delaware (collectively, the "Disclosure Complaints").
The Disclosure Complaints name as defendants the members of Billtrust's board of
directors and generally allege, among other things, that the defendants
authorized the filing of a materially incomplete and misleading proxy
statement. In addition to costs and attorneys' fees, the Disclosure Complaints
seek to enjoin the vote of Billtrust stockholders and the closing of the Merger;
and in the event the Merger is consummated to rescind the Merger and/or obtain
rescissory damages. In addition, as of December 5, 2022, Billtrust has received
five demand letters (one of which attached a draft complaint), each from counsel
representing a purported stockholder of Billtrust (the "Demand Letters"). The
Demand Letters contend that the proxy statement is materially incomplete and
misleading and demand that Billtrust's board of directors correct the alleged
disclosure deficiencies.
On November 14, 2022, a putative class action complaint captioned Kei v. Lane et
al., C.A No. 2022-1028-MTZ (the "Kei Complaint") challenging the merger was
filed in the Court of Chancery of the State of Delaware (the "Delaware Court")
asserting claims against each member of Billtrust's board of directors, EQT, and
Bain Capital Ventures. Among other things, the complaint asserts a claim against
such directors alleging that the merger violates 8 Del C. § 203 ("Section 203").
The complaint alleges that, prior to the time that Billtrust's board of
directors approved the Merger Agreement and the transactions contemplated
thereby, including the Merger, the voting agreements, and the rollover and
contribution agreements, that EQT had reached an "agreement, arrangement or
understanding" with respect to the voting of shares of Billtrust common stock
held by Mr. Lane and Bain Capital Ventures in favor of the Merger in exchange
for an agreement to roll over equity, thereby causing EQT to become the "owner"
of those shares and an "interested stockholder" under, and subject to the
restriction on business combinations set forth in, Section 203. The Plaintiff
asserts that if EQT is determined to have become an interested stockholder under
Section 203 prior to Billtrust's board of director approval, the Merger will be
subject to Section 203's restriction on business combinations because the voting
condition set forth in the merger agreement to which the merger is subject would
not satisfy the requirement in Section 203(a)(3) that a transaction with an
interested stockholder be approved by the affirmative vote of at least 662/3% of
the outstanding voting stock which is not owned by the interested stockholder
under Section 203. The Plaintiff also alleges various breach of fiduciary duty
and other claims against certain Defendants. On November 14, 2022, the
Plaintiff filed a motion for expedited proceedings, which all defendants opposed
on November 21, 2022. The Delaware Court held a hearing on Plaintiff's motion
to expedite on November 23, 2022 and denied the motion on the ground that the
Kei Complaint failed to state a colorable claim. On November 30, 2022, the
Plaintiff filed a notice and proposed order voluntarily dismissing the Kei
Complaint, which the Delaware Court granted that same day.
Billtrust believes that the claims asserted in the Disclosure Complaints and
contentions set forth in the Demand Letters are without merit and that no
supplemental disclosure is required under applicable law. However, in order to
minimize the exposure and distraction of responding to such actions, and without
admitting any liability or wrongdoing, the Company has determined voluntarily to
supplement the Definitive Proxy Statement as described in this supplemental
disclosure. Nothing in these supplemental disclosures shall be deemed an
admission of the legal necessity or materiality under applicable laws of any of
the disclosures set forth herein.
These supplemental disclosures will not affect the merger consideration to be
paid to stockholders of the Company in connection with the Merger or the timing
of the special meeting of the Company's stockholders, which will be held on
December 13, 2022 at 8:30 A.M. Eastern Time at 1009 Lenox Drive, Suite 101,
Lawrenceville, New Jersey 08648.
Supplemental Disclosures
The additional disclosures herein supplement the disclosures contained in, and
should be read in conjunction with, the Definitive Proxy Statement, which should
be read in its entirety. To the extent that information in this supplemental
disclosure differs from, or updates information contained in, the Definitive
Proxy Statement, the information in this supplemental disclosure shall supersede
or supplement the information in the Definitive Proxy Statement. Capitalized
terms used herein, but not otherwise defined, shall have the meanings ascribed
to such terms in the Definitive Proxy Statement.
The section of the Definitive Proxy Statement entitled "The Merger (Proposal
1)-Opinion of Billtrust's Financial Advisor" is amended and supplemented as
follows:
1. The second sentence of the fourth paragraph on page 46, under the sub-heading
"Discounted Cash Flow Analysis" of the proxy statement, is hereby revised as
follows:
"J.P. Morgan calculated a range of terminal values of Billtrust by applying
perpetual growth rates, which were confirmed as reasonable by the management of
Billtrustranging from 4.0% to 6.0% of the unlevered free cash flow of Billtrust
during the terminal year."
2. The first sentence of the fifth paragraph on page 46, under the sub-heading
"Discounted Cash Flow Analysis" of the proxy statement, is hereby revised as
follows:
"In addition, as directed by management of Billtrust, J.P. Morgan calculated the
present value of certain tax credits expected by Billtrust management to be
utilized by Billtrust from June 30, 2022 through December 31, 2029, which were
$0 for the six months ended December 31, 2022 and $0, $0, $3 million, $10
million, $18 million, $25 million and $1 million for the twelve months ended
December 31, 2023, 2024, 2025, 2026, 2027, 2028 and 2029, respectively. The
expected tax credits were discounted to present values as of June 30, 2022 using
the same range of discount rates, 13.0% to 14.0%."
3. The first sentence of the last paragraph on page 46, under the sub-heading
"Other Information" of the proxy statement, is hereby revised as follows:
"Analyst Price Targets. J.P. Morgan reviewed the price targets of certain six
publicly available equity research analyst price targets for the Class 1 common
stock available as of September 23, 2022, which provided a reference range of
$7.40 to $13.00 per share of the Class 1 common stock and $9.00 per share of
Class 1 common stock at the midpoint."
The section of the Definitive Proxy Statement entitled "The Merger (Proposal
1)-Projected Financial Information" is amended and supplemented as follows:
1. The first sentence of the third paragraph on page 48 of the proxy statement is
hereby revised as follows:
"We have included a summary of the Management Projections to give stockholders
access to certain nonpublic information prepared by Billtrust management for the
Billtrust board of directors in connection with its evaluation of the merger and
the merger consideration, which were also provided to J.P. Morgan, who was
directed by the Billtrust board of directors to use the Management Projections
(including certain extrapolations by J.P. Morgan of Billtrust's financial
performance from fiscal year 2028 through fiscal year 2031, which were prepared
at the direction of Billtrust management and approved by the Billtrust board of
directors) in their financial analyses with respect to the fairness of the $9.50
per share consideration to be paid pursuant to the merger agreement."
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This communication includes "forward-looking statements" within the meaning of
the "safe harbor" provisions of the United States Private Securities Litigation
Reform Act of 1995. Forward-looking statements may be identified by the use of
words such as "continue," "guidance," "expect," "outlook," "project," "believe"
or other similar expressions that predict or indicate future events or trends or
that are not statements of historical matters. These forward-looking statements
include, but are not limited to, statements regarding the timeline for closing
the transaction with EQT. These statements are based on various assumptions,
whether or not identified in this communication, and on the current expectations
of Billtrust's management and are not predictions of actual performance. These
forward-looking statements are provided for illustrative purposes only and are
not intended to serve as, and must not be relied on by any investor as, a
guarantee, an assurance, a prediction or a definitive statement of fact or
probability. Actual events and circumstances are difficult or impossible to
predict and may differ from assumptions. Many actual events and circumstances
are beyond the control of Billtrust. These forward-looking statements are
subject to a number of risks and uncertainties, including Billtrust's ability to
secure the required regulatory and stockholder approvals for the transaction;
Billtrust's ability to meet the applicable closing conditions of the
transaction; and the risks discussed in Billtrust's Annual Report on Form 10-K
for the fiscal year ended December 31, 2021 filed with the Securities and
Exchange Commission ("SEC") on March 9, 2022, under the heading "Risk Factors"
and other documents of Billtrust filed, or to be filed, with the SEC, including
our Quarterly Report on Form 10-Q for the quarter ended September 30, 2022. If
any of these risks materialize or any of Billtrust's assumptions prove
incorrect, actual results could differ materially from the results implied by
these forward-looking statements. There may be additional risks
that Billtrust presently does not know of or that Billtrust currently believes
are immaterial that could also cause actual results to differ from those
contained in the forward-looking statements. In addition, forward-looking
statements reflect Billtrust's expectations, plans or forecasts of future events
and views as of the date of this communication. Billtrust anticipates that
subsequent events and developments will cause Billtrust's assessments to change.
However, while Billtrust may elect to update these forward-looking statements at
some point in the future, Billtrust specifically disclaims any obligation to do
so. These forward-looking statements should not be relied upon as representing
Billtrust's assessments as of any date subsequent to the date of this
communication. Accordingly, undue reliance should not be placed upon the
forward-looking statements.
Additional Information and Where to Find It
This communication does not constitute an offer to buy or sell or the
solicitation of an offer to buy or sell any securities or a solicitation of any
vote or approval. This communication relates to the proposed transaction
involving Billtrust. In connection with the proposed transaction, on November
10, 2022, Billtrust filed with the SEC a definitive proxy statement on Schedule
14A (the "Proxy Statement") relating to a special meeting of its shareholders.
This communication is not a substitute for the Proxy Statement or any other
document that Billtrust may file with the SEC and send to its shareholders in
connection with the proposed transaction. The proposed transaction will be
submitted to Billtrust's shareholders for their consideration. Before making any
voting decision, Billtrust's shareholders are urged to read all relevant
documents filed or to be filed with the SEC, including the Proxy Statement, as
well as any amendments or supplements to those documents, when they become
available, because they will contain important information about Billtrust and
the proposed transaction.
Billtrust's shareholders will be able to obtain a free copy of the Proxy
Statement, as well as other filings containing information about Billtrust, free
of charge, at the SEC's website (www.sec.gov). Copies of the Proxy Statement and
other documents filed by Billtrust with the SEC may be obtained, without charge,
by contacting Billtrust through its website at https://investors.billtrust.com/.
Participants in the Solicitation
The Company, its directors, executive officers and other persons related
to Billtrust may be deemed to be participants in the solicitation of proxies
from Billtrust's shareholders in connection with the proposed transaction.
Information about the directors and executive officers of Billtrust and their
ownership of Billtrust common stock is set forth in Billtrust's annual report on
Form 10-K for the fiscal year ended December 31, 2021, which was filed with
the SEC on March 9, 2022 and in its proxy statement for its 2022 annual meeting
of stockholders, which was filed with the SEC on April 22, 2022. Additional
information regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security holdings or
otherwise, are included in the Proxy Statement and other relevant materials to
be filed with the SEC in connection with the proposed transaction. Free copies
of these documents may be obtained as described in the preceding paragraph.
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