COWEN GROUP, INC. (NASDAQ:COWN) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
On April 3, 2017, Cowen Group, Inc. (the Company) entered into a
Securities Purchase Agreement (the Purchase Agreement), dated as
of April 2, 2017, with ConvergEx Group, LLC (Convergex), Cowen CV
Acquisition LLC, an indirect wholly-owned subsidiary of the
Company (the Purchaser), ConvergEx Holdings LLC (the Seller), and
GTCR Convergex Holdings LLC (GTCR).
Securities Purchase Agreement (the Purchase Agreement), dated as
of April 2, 2017, with ConvergEx Group, LLC (Convergex), Cowen CV
Acquisition LLC, an indirect wholly-owned subsidiary of the
Company (the Purchaser), ConvergEx Holdings LLC (the Seller), and
GTCR Convergex Holdings LLC (GTCR).
The Purchase Agreement provides that, subject to the satisfaction
of conditions of the Purchase Agreement, the Purchaser will
purchase from the Seller one hundred percent of the issued and
outstanding equity securities (the Units) of Convergex from the
Seller (the Acquisition). to the Purchase Agreement, the
Purchaser will pay an aggregate purchase price of approximately
$116.4 million (the Purchase Price), subject to certain
adjustments, including in respect of the tangible book value of
Convergex at the closing of the Acquisition and transaction
expenses of the Seller borne by Convergex. A portion of the
Purchase Price will be deposited into escrow as further described
below. The portion of the Purchase Price paid to the Seller, and
amounts deposited in escrow, at the closing of the Acquisition
may be made in a combination of cash and shares of the Companys
Class A Common Stock as determined by the Company in its sole
discretion; provided that at least 50% of each such amount will
consist of cash. Any shares of the Companys Class A Common Stock
issued in connection with the Acquisition will be valued based on
the 30-day volume-weighted average price per share as of a date
between five and seven business days prior to the closing of the
Acquisition. A portion of the Purchase Price in an amount equal
to approximately $17.46 million will be deposited into an escrow
account to be available to satisfy claims for indemnification
that the Purchaser may have under the Purchase Agreement as well
as certain Purchase Price adjustments in excess of $2.0 million.
Additionally, a portion of the Purchase Price in an amount equal
to $3.0 million will be deposited into an escrow account to be
available to satisfy certain other claims for indemnification
that the Purchaser may have under the Purchase Agreement.
Finally, a portion of the Purchase Price in an amount equal to
$2.0 million will be deposited into an escrow account to be
available to satisfy any adjustments in the Purchase Price in
accordance with the Purchase Agreement.
of conditions of the Purchase Agreement, the Purchaser will
purchase from the Seller one hundred percent of the issued and
outstanding equity securities (the Units) of Convergex from the
Seller (the Acquisition). to the Purchase Agreement, the
Purchaser will pay an aggregate purchase price of approximately
$116.4 million (the Purchase Price), subject to certain
adjustments, including in respect of the tangible book value of
Convergex at the closing of the Acquisition and transaction
expenses of the Seller borne by Convergex. A portion of the
Purchase Price will be deposited into escrow as further described
below. The portion of the Purchase Price paid to the Seller, and
amounts deposited in escrow, at the closing of the Acquisition
may be made in a combination of cash and shares of the Companys
Class A Common Stock as determined by the Company in its sole
discretion; provided that at least 50% of each such amount will
consist of cash. Any shares of the Companys Class A Common Stock
issued in connection with the Acquisition will be valued based on
the 30-day volume-weighted average price per share as of a date
between five and seven business days prior to the closing of the
Acquisition. A portion of the Purchase Price in an amount equal
to approximately $17.46 million will be deposited into an escrow
account to be available to satisfy claims for indemnification
that the Purchaser may have under the Purchase Agreement as well
as certain Purchase Price adjustments in excess of $2.0 million.
Additionally, a portion of the Purchase Price in an amount equal
to $3.0 million will be deposited into an escrow account to be
available to satisfy certain other claims for indemnification
that the Purchaser may have under the Purchase Agreement.
Finally, a portion of the Purchase Price in an amount equal to
$2.0 million will be deposited into an escrow account to be
available to satisfy any adjustments in the Purchase Price in
accordance with the Purchase Agreement.
The Purchase Agreement contains customary representations,
warranties and covenants for a transaction of this type
regarding, among other things, Convergexs corporate organization
and capitalization, the accuracy of financial statements supplied
to the Purchaser, the absence of certain changes or events
relating to Convergex since December 31, 2015 and compliance with
certain regulatory matters. Similarly, the Seller makes
representations and warranties regarding, among other things, its
title to the Units. Additionally, the Purchaser makes
representations and warranties regarding, among other things, its
corporate organization. The Purchase Agreement also contains
post-closing indemnification obligations, subject to certain
limitations contained therein.
warranties and covenants for a transaction of this type
regarding, among other things, Convergexs corporate organization
and capitalization, the accuracy of financial statements supplied
to the Purchaser, the absence of certain changes or events
relating to Convergex since December 31, 2015 and compliance with
certain regulatory matters. Similarly, the Seller makes
representations and warranties regarding, among other things, its
title to the Units. Additionally, the Purchaser makes
representations and warranties regarding, among other things, its
corporate organization. The Purchase Agreement also contains
post-closing indemnification obligations, subject to certain
limitations contained therein.
The parties have made certain customary covenants in the Purchase
Agreement, including agreeing to use their reasonable best
efforts to obtain clearance under the Hart Scott Rodino Antitrust
Improvements Act of 1976, as amended (the HSR Act). In addition,
the Seller and
Agreement, including agreeing to use their reasonable best
efforts to obtain clearance under the Hart Scott Rodino Antitrust
Improvements Act of 1976, as amended (the HSR Act). In addition,
the Seller and
Convergex have made certain covenants in the Purchase
Agreement, including agreement to cause Convergex to conduct
its business in the ordinary course between the execution of
the Purchase Agreement and the closing of the Acquisition. to
the Purchase Agreement, the Company has guaranteed the
performance of the Purchasers obligations under the Purchaser
Agreement.
Agreement, including agreement to cause Convergex to conduct
its business in the ordinary course between the execution of
the Purchase Agreement and the closing of the Acquisition. to
the Purchase Agreement, the Company has guaranteed the
performance of the Purchasers obligations under the Purchaser
Agreement.
Each partys obligation to consummate the Acquisition is subject
to various customary closing conditions, including, but not
limited to, the expiration or termination of the applicable
waiting periods under the HSR Act, customary regulatory
approvals and the absence of certain orders issued by courts or
other governmental entities preventing the Acquisition. The
obligation of the Purchaser to consummate the Acquisition is
also subject to the absence of a Material Adverse Effect (as
defined in the Purchase Agreement) on Convergex.
to various customary closing conditions, including, but not
limited to, the expiration or termination of the applicable
waiting periods under the HSR Act, customary regulatory
approvals and the absence of certain orders issued by courts or
other governmental entities preventing the Acquisition. The
obligation of the Purchaser to consummate the Acquisition is
also subject to the absence of a Material Adverse Effect (as
defined in the Purchase Agreement) on Convergex.
Each party may terminate the Purchase Agreement if, among other
circumstances, (i) there has been a material violation or
breach by the other party of any covenant, representation or
warranty contained in the Purchase Agreement that has prevented
the satisfaction of any condition to the obligations of the
terminating party, subject to a 10-day cure period and (ii) the
closing of the Acquisition has not occurred by October 2, 2017
or, if certain conditions relating to the HSR Act and other
regulatory approvals have not been satisfied or waived as of
such date, such date will automatically be extended to January
2, 2018.
circumstances, (i) there has been a material violation or
breach by the other party of any covenant, representation or
warranty contained in the Purchase Agreement that has prevented
the satisfaction of any condition to the obligations of the
terminating party, subject to a 10-day cure period and (ii) the
closing of the Acquisition has not occurred by October 2, 2017
or, if certain conditions relating to the HSR Act and other
regulatory approvals have not been satisfied or waived as of
such date, such date will automatically be extended to January
2, 2018.
The Purchase Agreement contains representations and warranties
made by and to the parties thereto as of specific dates. The
statements embodied in those representations and warranties
were made for purposes of that contract between the parties and
are subject to qualifications and limitations agreed by the
parties in connection with negotiating the terms of that
contract. In addition, certain representations and warranties
were made as of a specified date, may be subject to a
contractual standard of materiality different from those
generally applicable to investors, or may have been used for
the purpose of allocating risk between the parties rather than
establishing matters as facts.
made by and to the parties thereto as of specific dates. The
statements embodied in those representations and warranties
were made for purposes of that contract between the parties and
are subject to qualifications and limitations agreed by the
parties in connection with negotiating the terms of that
contract. In addition, certain representations and warranties
were made as of a specified date, may be subject to a
contractual standard of materiality different from those
generally applicable to investors, or may have been used for
the purpose of allocating risk between the parties rather than
establishing matters as facts.
The foregoing description of the Purchase Agreement does not
purport to be complete and is qualified in its entirety by
reference to the full text of the Purchase Agreement, a copy of
which is attached hereto as Exhibit 2.1 and is incorporated
herein by reference.
purport to be complete and is qualified in its entirety by
reference to the full text of the Purchase Agreement, a copy of
which is attached hereto as Exhibit 2.1 and is incorporated
herein by reference.
Item 8.01. Other Events
On April 3, 2017, the Company issued a press release announcing
the transactions described in Item 1.01. A copy of the press
release is attached hereto as Exhibit 99.1 and is incorporated
by reference herein.
the transactions described in Item 1.01. A copy of the press
release is attached hereto as Exhibit 99.1 and is incorporated
by reference herein.
Item 9.01. Financial Statements and Exhibits
(d) Exhibits
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2.1
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Securities Purchase Agreement, dated as of April 2,
2017, by and among ConvergEx Holdings LLC, ConvergEx Group, LLC, GTCR Convergex Holdings LLC, Cowen CV Acquisition LLC and Cowen Group, Inc. |
99.1 Press Release issued by Cowen Group, Inc. on April 3,
2017.
2017.
About COWEN GROUP, INC. (NASDAQ:COWN)
Cowen Group, Inc. is a financial services company. The Company provides alternative investment management, investment banking, research, sales and trading, and prime brokerage services. It operates through two segments: alternative investment and broker-dealer. The alternative investment segment includes hedge funds, private equity structures, registered investment companies and listed investment vehicles. The broker-dealer segment offers industry focused investment banking for growth-oriented companies, including advisory and global capital markets origination and domain knowledge-driven research and a sales and trading platform for institutional investors under the Cowen name. Its broker-dealer businesses include research, sales and trading and investment banking services to companies and institutional investor clients in its target sectors, which include healthcare, technology, information and technology services, consumer, real estate investment trusts, energy and transportation. COWEN GROUP, INC. (NASDAQ:COWN) Recent Trading Information
COWEN GROUP, INC. (NASDAQ:COWN) closed its last trading session up +0.40 at 14.15 with 452,090 shares trading hands.