2U,INC. (NASDAQ:TWOU) Files An 8-K Entry into a Material Definitive AgreementItem 1.01 Entry into a Material Definitive Agreement
As previously disclosed, 2U,Inc. (the “Company”), through its wholly owned subsidiary (“2U South Africa”), agreed to acquire Get Educated International Proprietary Limited, a private company duly incorporated in South Africa (“GetSmarter”) to a Share Sale Agreement, dated as of May1, 2017 (the “Share Sale Agreement”) by and among 2U South Africa, GetSmarter, the shareholders of GetSmarter (the “Sellers”) and Samuel Edward Paddock, as the Sellers’ Representative. The Share Sale Agreement provided for 2U South Africa’s purchase of all of the outstanding equity interests of GetSmarter. On June29, 2017, 2U South Africa, GetSmarter, the Sellers and the Sellers’ Representative entered into an Addendum (the “Addendum”) in connection with the closing of the transaction contemplated in the Share Sale Agreement. Among other things, the Addendum amended the Share Sale Agreement to provide that the closing will occur on July1, 2017, to update the definition of “Final Unaudited Accounts” to be delivered at closing, to increase the “Target Cash on Hand” from 20 million South African Rand to 25 million South African Rand and certain other amendments to clarify the closing mechanics.
The foregoing summaries of the Share Sale Agreement and the Addendum do not purport to be complete and are subject to, and are qualified in their entirety by, the full text of the Share Sale Agreement, a copy of which is filed as Exhibit2.1 to the Company’s Quarterly Report on Form10-Q for the quarter ended March31, 2017, and is incorporated herein by reference, and the Addendum, a copy of which is filed as Exhibit2.2 to this Current Report on Form8-K, and is incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets
Effective at 12:01 a.m., Eastern Standard time, on July1, 2017, the Company, through its wholly owned subsidiary, 2U South Africa, completed its previously announced acquisition of all of the outstanding equity interests of GetSmarter to the Share Sale Agreement, as amended by the Addendum, for a purchase price of approximately $103 million in cash. The purchase price is subject to post-closing adjustments to the terms of the Share Sale Agreement. In addition, 2U South Africa agreed to pay a potential earn out payment of up to $20 million, subject to the achievement of certain financial milestones in calendar years 2017 and 2018. As a result of the transaction, GetSmarter became an indirect wholly owned subsidiary of the Company.
Under the terms of the Share Sale Agreement, certain of the Sellers have agreed to customary non-competition and non-solicitation obligations. In addition, the Company has issued restricted stock unit awards over the shares of common stock, par value $0.001 per share, of the Company to certain employees and officers of GetSmarter. The awards are subject to the 2014 2U,Inc. Equity Incentive Plan and will vest over either a two (2)or four (4)year period.
The foregoing summaries of the Share Sale Agreement and the Addendum do not purport to be complete and are subject to, and are qualified in their entirety by, the full text of the Share Sale Agreement, a copy of which is filed as Exhibit2.1 to the Company’s Quarterly Report on Form10-Q for the quarter ended March31, 2017, and is incorporated herein by reference, and the Addendum, a copy of which is filed as Exhibit2.2 to this Current Report on Form8-K, and is incorporated herein by reference.
Item 8.01 Other Events
On July3, 2017, the Company issued a press release announcing the completion of its acquisition of GetSmarter. The press release is attached as Exhibit99.1 to this Current Report on Form8-K and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(a) Financial Statements of Business Acquired. The financial information required by this item will be filed to an amendment to this Current Report on Form8-K no later than seventy-one (71) calendar days after the date of this Current Report on Form8-K was required to be filed.
