Item 1.01. Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On November 1, 2020, Endurance International Group Holdings, Inc., a Delaware
corporation (the "Company"), entered into an Agreement and Plan of Merger (the
"Merger Agreement") with Razorback Technology Intermediate Holdings, Inc., a
Delaware corporation (the "Parent"), and Razorback Technology, Inc., a Delaware
corporation and a wholly owned subsidiary of the Parent (the "Merger Sub"). The
Merger Agreement provides, subject to its terms and conditions, for the
acquisition of the Company by the Parent at a price of $9.50 per share of the
Company's common stock, par value $0.0001 (each, a "Share"), in cash, without
interest (the "Merger Consideration"), through the merger of the Merger Sub with
and into the Company (the "Merger"), with the Company surviving the Merger as a
wholly owned subsidiary of the Parent. The Parent and the Merger Sub are owned
by funds managed by affiliates of Clearlake Capital Group, L.P. (collectively,
the "Sponsor"). The Company's Board of Directors (the "Board") has unanimously
approved the Merger and the Merger Agreement and recommended that stockholders
adopt and approve the Merger Agreement, and the Company has agreed to hold a
stockholders meeting to submit the Merger Agreement to its stockholders for
their consideration.
Pursuant to the Merger Agreement, at the effective time of the Merger (the
"Effective Time"):
• each Share that is issued and outstanding immediately prior to the
Effective Time (other than Shares held in the treasury of the Company,
owned by any subsidiary of the Company, the Merger Sub, the Parent or any
other subsidiary of the Parent immediately prior to the Effective Time
(all of which will be canceled) and Shares held by any holder who is
entitled to, and who has perfected, appraisal rights under Delaware law)
will be automatically converted into the right to receive the Merger
Consideration;
• each then-outstanding and unexercised Company stock option shall vest in
full and automatically be canceled and converted into the right to
receive the excess, if any, of the Merger Consideration over the exercise
price per share of such stock option; provided that, in the event that
the exercise price of any such stock option is equal to or greater than
the Merger Consideration, such stock option will be canceled, without any
consideration being payable in respect thereof and have no further force
or effect;
• each Company restricted stock unit that is then outstanding and unvested
shall vest in full and automatically be canceled and converted into the
right to receive the Merger Consideration (with exceptions for certain of
such units granted in 2020 that shall convert into the right to receive
cash equal to the Merger Consideration upon the service and vesting terms
in such units, subject to certain acceleration); and
• each Company restricted stock award that is then outstanding and unvested
shall vest in full and automatically be canceled and converted into the
right to receive the Merger Consideration.
The Merger Agreement contains customary representations and warranties from both
the Company, on the one hand, and the Parent and the Merger Sub, on the other
hand. It also contains customary covenants, including covenants providing for
each of the Company and the Parent to use its reasonable best efforts to cause
the Merger to be consummated, and covenants requiring the Company, among other
things, (i) to use commercially reasonable efforts to conduct its business in
the ordinary course during the interim period between the execution of the
Merger Agreement and the Effective Time, (ii) not to engage in specified types
of transactions during such period, and (iii) not to solicit proposals, engage
in discussions relating to alternative acquisition proposals or change the
recommendation of the Board to the Company's stockholders regarding the Merger
Agreement, in each case except as otherwise permitted by the Merger Agreement,
including in connection with the compliance by the Board with its fiduciary
duties under applicable law.
--------------------------------------------------------------------------------
Completion of the Merger is subject to customary closing conditions, including
(i) approval of the Merger Agreement by the Company's stockholders, (ii) the
expiration or termination of applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (iii) the
absence of governmental injunctions or other legal restraints prohibiting the
Merger. In addition, the obligation of each party to consummate the Merger is
conditioned upon, among other things, the accuracy of the representations and
warranties of the other party (subject to certain materiality exceptions),
and material compliance by the other party with its covenants under the Merger
Agreement. The Parent's obligations under the Merger Agreement are not subject
to any financing condition.
The Parent has obtained equity and debt financing commitments for the
transactions contemplated by the Merger Agreement. J.P. Morgan, BofA Securities,
Deutsche Bank Securities, and UBS Investment Bank have agreed to provide debt
financing for the transactions, subject to the terms and conditions set forth in
a debt commitment letter delivered to the Parent. In addition, certain funds
managed by affiliates of the Sponsor have delivered an equity commitment letter
to the Parent, pursuant to which, upon the terms and subject to the conditions
set forth therein, such funds have committed to capitalize the Parent at or
prior to the closing of the Merger with the equity contributions. The Merger
Agreement requires the Parent to use its reasonable best efforts to arrange and
obtain the financing on the terms and conditions described in the equity and
debt financing commitments.
The Merger Agreement may be terminated, subject to the terms and conditions of
the Merger Agreement: (i) by mutual written consent of the Parent and the
Company; (ii) by either the Company or the Parent, if a governmental injunction
or other legal restraint prevents the consummation of the Merger; (iii) by
either the Company or the Parent, if the requisite vote of the Company's
stockholders has not been obtained; or (iv) by either the Company or the Parent
upon the other party's uncured material breach of any representation, warranty,
covenant or agreement under the Merger Agreement. The Merger Agreement may also
be terminated (A) by the Parent if the Board fails to recommend or changes its
recommendation regarding the Merger, or (B) by the Company, in order to enter
into a definitive agreement with respect to a superior proposal, subject to
specified limitations. Subject to certain conditions, the Company may terminate
the Merger Agreement if, after the marketing period of eighteen consecutive
business days has ended (unless waived by the Parent), all of the conditions to
the Parent's obligations to close are satisfied and the Parent fails to
consummate the Merger within three Business Days after notice from the Company
that the conditions to the Company's obligations to close have been satisfied.
In addition to the foregoing termination rights, and subject to certain
limitations, either party may terminate the Merger Agreement if the Merger is
not consummated by April 30, 2021.
If the Merger Agreement is terminated under certain circumstances specified in
the Merger Agreement, the Company will be required to pay the Parent a
termination fee of $37,393,000 (including under specified circumstances in
connection with the Company's entry into an agreement with respect to a superior
proposal). The Merger Agreement also provides that the Parent will be required
to pay the Company a reverse termination fee of $119,656,000 under certain
specified circumstances set forth in the Merger Agreement. The Sponsor has
provided the Company with a limited guarantee in favor of the Company
guaranteeing the Parent's obligation to pay the reverse termination fee and
certain other payment obligations of the Parent and the Merger Sub pursuant to
the Merger Agreement.
The foregoing description of the Merger Agreement does not purport to be
complete and is qualified in its entirety by reference to the Merger Agreement,
a copy of which is filed as Exhibit 2.1 hereto and is incorporated herein by
reference.
The Merger Agreement has been included to provide investors and security holders
with information regarding its terms. It is not intended to provide any other
factual information about the Company, the Parent, the Merger Sub or their
respective subsidiaries and affiliates. The Merger Agreement contains
representations and warranties by the Company, on the one hand, and the Parent
and the Merger Sub, on the other hand, made solely for the benefit of the
other. The assertions embodied in those representations and warranties are
subject to qualifications and limitations agreed to by the respective parties in
negotiating the terms of the Merger Agreement, including information in
confidential disclosure schedules delivered in connection with the signing of
the Merger Agreement. Moreover, certain representations and warranties in the
Merger Agreement were made as of a specified date, may be subject to a
contractual standard of materiality different from what might be viewed as
material to investors, or may have been used for the purpose of allocating risk
between the Company, on the one hand, and the
. . .
Item 8.01. Other Events.
Voting Agreement
On November 1, 2020, concurrently with the execution of the Merger Agreement,
the Parent entered into a Voting and Support Agreement (the "Voting Agreement")
with certain funds affiliated with Goldman Sachs & Co. LLC and certain funds
affiliated with Warburg Pincus LLC, each a stockholder of the Company and
collectively beneficially owning approximately 48% of the outstanding voting
power of the Company, pursuant to which such stockholders agreed, among other
things, to vote Shares aggregating to 36% of the outstanding Shares in favor of
the adoption of the Merger Agreement and any matter that would reasonably be
expected to facilitate the Merger, and agreed to certain restrictions on their
ability to take actions with respect to the Company and such Shares.
The foregoing description of the Voting Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of the
form of Voting Agreement, a copy of which is attached hereto as Exhibit 99.1 and
incorporated herein by reference.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
See the Exhibit Index attached to this Current Report on Form 8-K, which is
incorporated herein by reference.
Important Additional Information Will Be Filed with the SEC
The Company intends to file with the Securities and Exchange Commission (the
"SEC") a proxy statement (the "proxy statement") and mail the proxy statement to
its stockholders. The Proxy Statement will contain important information about
the Parent, the Company, the transaction and related matters. INVESTORS AND
SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THE PROXY STATEMENT WHEN IT
BECOMES AVAILABLE, AND OTHER RELEVANT DOCUMENTS, AND ANY RELATED AMENDMENTS OR
SUPPLEMENTS, FILED WITH THE SEC CAREFULLY BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE COMPANY, THE PROPOSED TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain free copies of the proxy statement and
other documents (when available) that the Company files with the SEC through the
website maintained by the SEC at www.sec.gov. Copies of the documents filed with
the SEC by the Company will be available free of charge on the Company's
investor relations website at www.ir.endurance.com or by contacting the
Company's Investor Relations Department at ir@endurance.com.
The Company and certain of its directors, executive officers and employees may
be considered participants in the solicitation of proxies in connection with the
proposed transaction. Information regarding the persons who may, under the rules
of the SEC, be deemed participants in the solicitation of the shareholders of
the Company in connection with the transaction, including a description of their
respective direct or indirect interests, by security holdings or otherwise, will
be included in the Proxy Statement described above when it is filed with the
SEC. Additional information regarding the Company's directors and executive
officers is also included in the Company's proxy statement for its 2020 Annual
Meeting of Stockholders, which was filed with the SEC on April 9, 2020. As of
September 30, 2020, the Company's directors and executive officers beneficially
owned approximately 76,136,334 shares, or 52.8%, of the Company's common stock.
These documents are available free of charge as described above.
--------------------------------------------------------------------------------
Safe Harbor for Forward-Looking Statements
This filing contains "forward-looking statements" as defined in the U.S. Private
Securities Litigation Reform Act of 1995. The reader is cautioned not to rely on
these forward-looking statements, such as statements regarding the proposed
transaction between the Parent and the Company, the expected timetable for
completing the transaction, future financial and operating results, benefits and
synergies of the transaction, future opportunities for the combined company and
any other statements about the Parent's and the Company's managements' future
expectations, beliefs, goals, plans or prospects. These statements are based on
current expectations of future events, and these include statements using the
words such as "will," "believes," "plans," "anticipates," "expects," estimates
and similar expressions. If underlying assumptions prove inaccurate or known or
unknown risks or uncertainties materialize, actual results could vary materially
from the expectations of the Company. Risks and uncertainties include, but are
not limited to: the risk that the transaction may not be completed in a timely
manner or at all, which may adversely affect the Company's business and the
price of its common stock; the failure to satisfy the conditions to the
consummation of the transaction, including the adoption of the merger agreement
by the stockholders of the Company, and the receipt of certain governmental and
regulatory approvals; the failure of the purchaser to obtain the necessary
financing pursuant to the arrangements set forth in the debt commitment letters
delivered pursuant to the merger agreement or otherwise; the occurrence of any
event, change or other circumstance that could give rise to the termination of
the merger agreement; the effect of the announcement or pendency of the
transaction on the Company's business relationships, operating results, and
business generally; risks that the proposed transaction disrupts current plans
and operations of the Company and potential difficulties in the Company's
employee retention as a result of the transaction; risks related to diverting
management's attention from the Company's ongoing business operations, and the
outcome of any legal proceedings that may be instituted against the Company or
the purchaser related to the merger agreement or the transaction. The foregoing
list of factors is not exhaustive. You should carefully consider the foregoing
factors and the other risks and uncertainties that affect the businesses of the
Company described in the "Risk Factors" in our Annual Report on Form 10-K for
the period ended December 31, 2019 and in our Quarterly Reports on Form 10-Q for
the quarters ended March 31, 2020 and June 30, 2020, and other reports we file
with the SEC. We assume no obligation to update any forward-looking statements
contained in this document as a result of new information, future events or
otherwise. These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ materially
from those contemplated in the forward-looking statements. Copies of these
filings are available online at www.sec.gov and https://ir.endurance.com. The
Company assumes no obligation and does not intend to update or revise these
forward-looking statements, whether as a result of new information, future
events, or otherwise. The Company does not give any assurance that it will
achieve its expectations.
© Edgar Online, source Glimpses