DESTINATION MATERNITY CORPORATION (NASDAQ:DEST) Files An 8-K Entry into a Material Definitive Agreement
Item1.01. Entry into a Material Definitive Agreement.
On December19, 2016 (the Effective Date), Destination Maternity
Corporation, a Delaware corporation (the Company), entered into
an Agreement and Plan of Merger (the Merger Agreement) with
Orchestra-Premaman S.A., a socit anonyme organized under
the laws of France (Orchestra), and US OP Corporation, a Delaware
corporation and a wholly owned subsidiary of Orchestra (Merger
Sub). The Merger Agreement provides for, among other things, the
merger of Merger Sub with and into the Company (the Merger), with
the Company surviving the Merger. The Companys Board of Directors
(the Company Board) unanimously approved and declared advisable
the Merger Agreement and the transactions contemplated by the
Merger Agreement and resolved, subject to the terms of the Merger
Agreement, to recommend that the Companys stockholders adopt the
Merger Agreement.
Merger Agreement
Subject to the terms and conditions set forth in the Merger
Agreement, at the effective time of the Merger (the Effective
Time), each of the Companys issued and outstanding shares of
common stock, par value $0.01 per share (the Company Shares)
(other than shares owned directly by Orchestra, Merger Sub or the
Company immediately prior to the Effective Time) will be
converted into the right to receive 0.515 (the Exchange Ratio)
American depositary shares of Orchestra (Orchestra ADSs). Each
Orchestra ADS represents one Orchestra ordinary share with a
nominal value of 1.20 per ordinary share (Orchestra Ordinary
Share) and will be evidenced by an American depositary receipt.
The Orchestra ADSs to be issued in the Merger will be listed on
the NASDAQ Stock Market (NASDAQ).
to the terms of the Merger Agreement, immediately prior to the
Effective Time, each outstanding option (each an Option) to
acquire Company Shares will accelerate and become vested in full
and be cancelled. Upon such cancellation, each such Option that
has a per share exercise price that is less than the closing
price of Company Shares on NASDAQ on the day immediately prior to
the closing date will receive a number of shares of Company
Shares determined to the formula set forth in the Merger
Agreement, and such Company Shares will be converted into
Orchestra ADSs in the Merger based on the Exchange Ratio. Each
such Option that has a per share exercise price that is equal to
or greater than the closing price of Company Shares on NASDAQ on
the day immediately prior to the closing date will receive no
consideration with respect to the cancellation thereof.
to the terms of the Merger Agreement, each outstanding
performance-based restricted stock unit denominated in Company
Shares (RSUs), each deferred stock unit denominated in Company
Shares (DSUs) and each restricted stock awards will, immediately
prior to the Effective Time, accelerate and become vested in full
and shall thereafter represent that number of Company Shares that
are subject to such RSU (based on the deemed achievement of the
target level of performance applicable to each RSU), DSU or
restricted stock award, in the case of the RSUs and restricted
stock awards, with the applicable withholding taxes paid by
withholding of Company Shares otherwise issuable to such RSU or
restricted stock award holder. The Company Shares resulting from
such settlement will be converted into Orchestra ADSs in the
Merger based on the Exchange Ratio.
Completion of the Merger is subject to satisfaction or waiver of
customary closing conditions including, among other things,
(1)the adoption of the Merger Agreement by the Companys
stockholders; (2)the requisite approval by holders of Orchestra
Ordinary Share approving the issuance of Orchestra Ordinary
Shares in connection with the Merger, (3)the effectiveness under
the Securities Act of 1933 of the Form F-4 registration statement
to be filed with the U.S. Securities and Exchange Commission (the
SEC) by Orchestra; (4)NASDAQs authorization of the listing of
Orchestra ADSs to be issued in the Merger; (5)the expiration or
early termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and approval clearance to EU Merger Regulation; (6)the accuracy
of the other partys representations and warranties contained in
the Merger Agreement (subject to specified materiality
thresholds); (7) the other partys performance in all material
respects of its obligations under the Merger Agreement; and
(8)the absence of a material adverse effect, as defined in the
Merger Agreement, on the part of the other party.
The Merger Agreement contains representations and warranties of
the parties customary for a transaction of this nature. The
Merger Agreement also contains customary covenants and
agreements, including, among others, agreements by the Company
and Orchestra to conduct their respective businesses in the
ordinary course consistent with past practice during the period
between the execution of the Merger Agreement and the Effective
Time, to not engage in certain kinds of transactions or take
certain actions during this period unless consented to in writing
by the other party, to convene and hold meetings of their
respective stockholders/shareholders for the purpose of obtaining
the requisite approval and, subject to certain exceptions, not to
withdraw (or qualify or modify in a manner adverse to the other
party) the recommendation of the Merger Agreement and the Merger
by such partys board of directors. The Company is also subject to
restrictions on its ability to solicit alternative acquisition
proposals and to provide information to, and engage in discussion
with, third parties regarding such proposals, except under
limited circumstances to permit the Company Board to comply with
its fiduciary duties.
The Merger Agreement contains certain termination rights for both
the Company and Orchestra, including, in the case of the Company,
in specified circumstances in connection with an alternative
acquisition proposal that has been determined by the Company
Board to be a superior proposal (as defined in the Merger
Agreement). Upon termination of the Merger Agreement, under
specified circumstances (including, in the case of the Company,
in connection with a superior proposal and, in the case of
Orchestra, the failure to obtain the required Orchestra
shareholder approval), either the Company or Orchestra may be
required to pay the other party a termination fee of $5.0million.
In addition, and except in certain limited circumstances, if the
Merger Agreement is terminated due to the failure to obtain the
required vote from the Companys stockholders to adopt the Merger
Agreement, the Company will be obligated to reimburse Orchestra
for its reasonable out-of-pocket fees and expenses incurred in
connection with the Merger Agreement, subject to a cap of
$2.5million. Such expense reimbursement may be deducted from any
termination fee payable by the Company, if applicable.
The foregoing description of the Merger Agreement and the
transactions contemplated thereby is not complete and is
qualified in its entirety by reference to the full text of such
agreement, a copy of which is filed as Exhibit 2.1 hereto and
incorporated herein by reference.
The representations, warranties and covenants set forth in the
Merger Agreement have been made only for the purposes of the
Merger Agreement and solely for the benefit of the parties
thereto. In addition, such representations, warranties and
covenants (i)are subject to materiality qualifications contained
in the Merger Agreement that may differ from what may be viewed
as material by investors, (ii)are made only as of the dates
specified in the Merger Agreement and (iii)have been included in
the Merger Agreement for the purposes of allocating contractual
risk between the parties to the Merger Agreement instead of
establishing these matters as fact. Accordingly, the Merger
Agreement is included with this filing only to provide investors
with information regarding its terms and not to provide investors
with any other factual information regarding the parties or their
respective businesses. Investors should not rely on the
representations, warranties and covenants or any descriptions
thereof as characterizations of the actual state of facts or
condition of the parties or any of their respective affiliates.
Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the
Merger Agreement, which subsequent information may or may not be
fully reflected in the Companys public disclosures.
Governance Agreement
In connection with the execution of the Merger Agreement, the
Company, Orchestra and Orchestras principal shareholder, Yeled
Invest S..r.l. (Yeled), which owns approximately 68% of the
Orchestra Ordinary Shares and 13.7% of the Company Shares, have
entered into a Governance Agreement (the Governance Agreement).
Among other things, the Governance Agreement provides for certain
terms and conditions with respect to the governance of Orchestra
following the completion of the Merger, including provisions
relating to board composition, establishment of board committees,
and certain significant transactions that would require
supermajority approval by the board of directors of Orchestra.
The Governance Agreement also requires Orchestra to maintain the
listing of the Orchestra ADSs on NASDAQ for three years after the
closing, and to make certain disclosures to Orchestras
shareholders. In addition, Yeled has agreed to vote the Orchestra
Ordinary Shares and the Company Shares owned by it in favor of
the transaction at the Orchestra shareholders meeting and the
Company stockholders meeting, respectively. The Governance
Agreement will terminate upon the earlier to occur of the
termination of the Merger Agreement to its terms and the third
anniversary of the Effective Time.
The foregoing description of the Governance Agreement is not
purported to be complete and is qualified in its entirety by
reference to the full text of such agreement, a copy of which is
filed as Exhibit 10.1 hereto and incorporated herein by
reference.
Item2.03. Creation of a Direct Financial Obligation or an
Obligation Under an Off-Balance Sheet Arrangement of a
Registrant
In connection with the Merger and Companys entry into the Merger
Agreement, the Company also entered into (i)a Consent and
Amendment No.1 to Amended and Restated Credit Agreement, relating
to the Companys $70,000,000 senior secured revolving credit
facility (the Credit Facility), (ii) a Consent and Amendment No.1
to Term Loan Credit Agreement,
relating to the Companys $32,000,000 term loan agreement (the
Term Loan Agreement), and (iii)a First Amendment to Intercreditor
Agreement relating to the intercreditor agreement (the
Intercreditor Agreement) between the agent under the Credit
Facility and the agent under the Term Loan Credit Agreement
(collectively, the Financing Amendments).
The Financing Amendments provide the consent of the lenders under
the Credit Facility and Term Loan Credit Agreement to the Merger,
subject to certain conditions, and provide for a new definition
of Change of Control in the Credit Facility and Term Loan Credit
Agreement that will apply after the Merger becomes effective. In
the Financing Amendment to the Term Loan Agreement, the parties
also amended the definition of Consolidated EBITDA to allow the
Company to add back certain transaction costs relating to the
Merger.
The foregoing description is not complete and is qualified in its
entirety by reference to the full text of the Financing
Amendments, copies of which are filed as Exhibits 10.2, 10.3 and
10.4 hereto, respectively, and incorporated herein by reference.
Item8.01 Other Events.
On December20, 2016, the Company and Orchestra issued a joint
press release relating to the entry into the Merger Agreement. A
copy of the press release is attached hereto as Exhit 99.1 and
incorporated herein by reference.
Additional Information
This report does not constitute an offer to buy or solicitation
of any offer to sell securities or a solicitation of any vote or
approval. It does not constitute a prospectus or prospectus
equivalent document. This report relates to the proposed business
combination between Destination and Orchestra (the Merger). The
proposed combination will be submitted to Destinations and
Orchestras stockholders for their consideration and approval. In
connection with the proposed combination, Destination and
Orchestra will file relevant materials with (i)the SEC, including
an Orchestra registration statement on Form F-4 that will include
a proxy statement of Destination and a prospectus of Orchestra,
and (ii)the Autorit des Marchs Financiers (AMF) in France.
Destination will mail the proxy statement/prospectus to its
stockholders and Orchestra will make the Securities Note and
other relevant materials available to its stockholders. This
report is not a substitute for the F-4 registration statement,
proxy statement/prospectus, Securities Note (note
dopration), Orchestras Registration Document (document
de rfrence) or other document(s) that Destination and/or
Orchestra may file with the SEC or the AMF in connection with the
proposed transaction. INVESTORS AND SECURITY HOLDERS ARE URGED TO
READ CAREFULLY THE REGISTRATION STATEMENT, PROXY
STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH THE SEC AND
THE SECURITIES NOTE AS REGISTERED WITH THE AMF WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT
DESTINATION, ORCHESTRA AND THE PROPOSED TRANSACTION. Investors
and security holders may obtain free copies of these documents
(when they are available) and other related documents filed with
the SEC at the SECs web site at www.sec.gov, and the
related documents filed with the AMF at the AMFs website at
http://www.amf-france.org/. Investors may request copies of the
documents filed with the SEC by Destination by directing a
request to Destinations Investor Relations department at
Destination Maternity, Attention: Investor Relations, 232
Strawbridge Drive, Moorestown, NJ 08057 or to Destinations
Investor Relations department at 203-682-8225 or by email to
DestinationMaternityIR@icrinc.com. Investors may request
copies of the documents filed with the AMF or the SEC by
Orchestra by directing a request to ACTIFIN, Attention: Stphane
Ruiz or to Stphane Ruiz at 33 01 56 88 11 15 in France or by
email to sruiz@actifin.fr.
Participants in the Solicitation
Destination, Orchestra and their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from stockholders in connection with the
approval of the Merger and may have direct or indirect interests
in the Merger. Information about Orchestras directors and
executive officers is set forth in Orchestras 2015 Registration
Document (Document de Rfrence 2015) filed with the AMF
on June30, 2016 under number R.16-063 (and also available in a
convenience English translation version) incorporating its
accounts 2015, as the same may be amended, updated or superseded
from time to time, which may be obtained free of charge at
http://www.orchestra-kazibao.com/informations-financieres/.
Information about Destinations directors and executive officers
and their respective interests in Destination by security
holdings or otherwise is set forth in Destinations Proxy
Statement on Schedule 14A for its 2016 Annual Meeting of
Stockholders, which was filed with the SEC on April18, 2016, and
its Annual Report on Form 10-K for the fiscal year ended
January30, 2016, which was filed with the SEC on April14, 2016.
These documents are available free of charge at the SECs website
at www.sec.gov and from the Investors section of Destinations
website at www.investor.destinationmaternity.com.
Additional information regarding the interests of participants in
the solicitation of proxies in connection with the Merger will be
included in the proxy statement/prospectus and the registration
statement that Orchestra will file with the SEC in connection
with the solicitation of proxies from Destinations stockholders
to approve the Merger.
Cautionary Statements Related to Forward-Looking
Statements
Some of the information in this report, including the information
incorporated by reference, contains forward-looking statements
within the meaning of Section27A of the Securities Act of 1933,
as amended, and Section21E of the Securities Exchange Act of
1934, as amended (the Exchange Act). These forward-looking
statements involve a number of risks and uncertainties related to
operating performance and outlook of Destination and the combined
businesses of Destination and Orchestra. following the Merger, as
well as other future events and their potential effects on
Destination and the combined company that are subject to risks
and uncertainties. The following factors, among others, in the
future could cause Destinations or Orchestras actual results,
performance, achievements or industry results to be materially
different from any future results, performance or achievements
expressed or implied by these forward-looking statements. These
factors include, but are not limited to, statements relating to
(i)the possibility that the Merger does not close when expected
or at all, or that Destination and Orchestra, in order to achieve
governmental and regulatory approvals, may be required to modify
aspects of the Merger or to accept conditions that could
adversely affect the combined company or the expected benefits of
the proposed Merger; (ii)the ability to obtain the requisite
Destination and Orchestra stockholder approvals, on the proposed
terms and timeframe; (iii)the benefits of the Merger, including
future financial and operating results of the combined company,
Destination and Orchestras plans, objectives, expectations and
intentions, and the ability to realize the expected synergies or
savings from the proposed Merger in the amounts or in the
timeframe anticipated; (iv)the risk that competing offers or
acquisition proposals will be made; (v)the ability to integrate
Destinations and Orchestras businesses in a timely and
cost-efficient manner; (vi)the inherent uncertainty associated
with financial projections; (vii)the potential impact of the
announcement or closing of the proposed Merger on customer,
supplier, employee and other relationships; and (viii)other
factors referenced in Destinations Annual Report on Form 10-K or
Orchestras Registration Document (document de rfrence),
including those set forth under the caption Risk Factors. In
addition, these forward-looking statements necessarily depend
upon assumptions, estimates and dates that may be incorrect or
imprecise and involve known and unknown risks,
uncertainties and other factors. Accordingly, any forward-looking
statements included in this announcement do not purport to be
predictions of future events or circumstances and may not be
realized. Forward-looking statements can be identified by, among
other things, the use of forward- looking terms such as believes,
expects, may, will, should, seeks, pro forma, anticipates,
intends, continues, could, estimates, plans, potential, predicts,
goal, objective, or the negative of any of these terms, or
comparable terminology, or by discussions of our outlook, plans,
goals, strategy or intentions. Forward-looking statements speak
only as of the date made. Except as required by applicable law,
including the securities laws of the United States and the rules
and regulations of the SEC, we assume no obligation to update any
of these forward-looking statements to reflect actual results,
changes in assumptions or changes in other factors affecting
these forward-looking statements.
Nothing contained herein shall be deemed to be a forecast,
projection or estimate of the future financial performance of
Destination and Orchestra, or the combined company, following the
implementation of the proposed Merger or otherwise. No statement
in this report should be interpreted to mean that the earnings
per share, profits, margins or cash flows of Destination or the
combined company for the current or future financial years would
necessarily match or exceed the historical published figures.
Item9.01 Financial Statements and Exhibits.
|
Exhibit No. |
Description |
|
| 2.1 |
Agreement and Plan of Merger, dated as of December19, 2016, by and among Destination Maternity Corporation, Orchestra-Premaman S.A. and US OP Corporation.* |
|
| 10.1 |
Governance Agreement, dated as of December19, 2016, by and among Destination Maternity Corporation, Orchestra-Prmaman S.A. and Yeled Invest S..r.l.* |
|
| 10.2 |
Consent and Amendment No.1 to Amended and Restated Credit Agreement, dated as of December18, 2016, by and among Wells Fargo Bank, National Association, Destination Maternity Corporation, Cave Springs, Inc., Mothers Work Canada, Inc. and DM Urban Renewal, LLC. |
|
| 10.3 |
Consent and Amendment No.1 to Term Loan Credit Agreement, dated as of December18, 2016, by and among Wells Fargo Bank, National Association, TPG Specialty Lending, Inc., Destination Maternity Corporation, Cave Springs, Inc., Mothers Work Canada, Inc., and DM Urban Renewal, LLC. |
|
| 10.4 |
First Amendment to Intercreditor Agreement, dated December18, 2016, by and among Wells Fargo Bank, National Association, Destination Maternity Corporation, Cave Springs, Inc., Mothers Work Canada, Inc. and DM Urban Renewal, LLC. |
|
| 99.1 | Joint Press Release dated December20, 2016. |
| * |
The Company has omitted schedules and other similar attachments to such agreement to Item 601(b) of Regulation S-K. The Company will furnish a copy of such omitted document to the SEC upon request. |
to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf
by the undersigned duly authorized.
| Date: December20, 2016 | DESTINATION MATERNITY CORPORATION | |||||
| By: |
/s/ Anthony M. Romano |
|||||
| Anthony M. Romano | ||||||
| Chief Executive Officer President |
EXHIBIT INDEX
| Exhibit No. | Description | |
| 2.1 |
Agreement and Plan of Merger, dated as of December19, 2016, by and among Destination Maternity Corporation, Orchestra-Prmaman S.A. and US OP Corporation.* |
|
| 10.1 |
Governance Agreement, dated as of December19, 2016, by and among Destination Maternity Corporation, Orchestra-Premaman S.A. and Yeled Invest S..r.l.* |
|
| 10.2 |
Consent and Amendment No.1 to Amended and Restated Credit Agreement, dated as of December18, 2016, by and among Wells Fargo Bank, National Association, Destination Maternity Corporation, Cave Springs, Inc., Mothers Work Canada, Inc. and DM Urban Renewal, LLC. |
|
| 10.3 |
Consent and Amendment No.1 to Term Loan Credit Agreement, dated as of December18, 2016, by and among Wells Fargo Bank, National Association, TPG Specialty Lending, Inc., Destination Maternity Corporation, Cave Springs, Inc., Mothers Work Canada, Inc., and DM Urban Renewal, LLC. |
|
| 10.4 |
First Amendment to Intercreditor Agreement, dated December18, 2016, by and among Wells Fargo Bank, National Association, Destination Maternity Corporation, Cave Springs, Inc., Mothers Work Canada, Inc. and DM Urban Renewal, LLC. |
|
| 99.1 | Joint Press Release dated December19, 2016. |
| * |
The Company has omitted schedules and other similar attachments to such agreement |
About DESTINATION MATERNITY CORPORATION (NASDAQ:DEST)