Everbridge, Inc. (NASDAQ:EVBG) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On July 29, 2019, Everbridge, Inc. (the Company) entered into a Membership Interest Purchase Agreement (the Purchase Agreement) with NC4 Inc. (NC4), NC4 Public Sector LLC (NC4 Public Sector), and Celerium Group Inc. (the Seller), to which the Company purchased all of the outstanding membership interests of NC4 Inc. and NC4 Public Sector (the Acquisition) for total consideration of approximately $83 million. The Company paid approximately $52 million in cash at closing from the Companys cash and cash equivalents, which is subject to certain post-closing net working capital adjustments provided for in the Purchase Agreement. The remaining purchase price was paid with 320,998 newly issued shares of the Companys common stock (the Shares) at a per share price of $97.51, which is based on the twenty-day volume weighted average stock price of the Companys common stock prior to signing the Purchase Agreement.
The Purchase Agreement requires the Company to file a prospectus supplement to the Companys existing shelf registration statement on Form S-3 (File No. 333-229239) within five days after closing the Acquisition to register the Shares, and to maintain the effectiveness of such registration statement until the earlier of (i) the date as of which the Seller may sell all of the Shares without restriction to Rule 144 promulgated under the Securities Act of 1933, as amended, or (ii) the date on which the Seller shall have sold all the Shares. Daily sales of the Shares are limited to no more than 10% of the average daily trading volume of the Companys common stock on The Nasdaq Global Market.
The Purchase Agreement contains customary representations, warranties and covenants of NC4 and NC4 Public Sector. In connection with the Acquisition, $3.7 million in cash and 25,522 shares of the Shares have been placed in a third party escrow for eighteen months to secure general indemnity obligations under the Purchase Agreement. An additional $2.0 million in cash has been placed in a third party escrow for eighteen months to secure NC4s tax obligations.
On August 1, 2019, the Acquisition was consummated to the Purchase Agreement, except that the transfer of the NC4 Public Sector business, which represents less than 5% of the total purchase price, will be consummated no later than September 30, 2019.
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 agreement, a copy of which is attached to this Current Report as Exhibit 2.1 and incorporated herein by reference. The Purchase Agreement has been attached to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company or NC4. In particular, the representations and warranties contained in the Purchase Agreement were made only for the purposes of the Purchase Agreement as of specific dates and were qualified by disclosures between the parties and a contractual standard of materiality that is different from those generally applicable to stockholders, among other limitations. The representations and warranties were made for the purposes of allocating contractual risk between the parties to the Purchase Agreement and should not be relied upon as a disclosure of factual information relating to the Company or NC4.
This report includes forward-looking statements. All statements other than statements of historical facts, including statements regarding the completion of the Acquisition, are forward-looking statements. These forward-looking statements are based on the Companys current expectations and projections about future events and trends that the Company believes may affect its financial condition, results of operations, strategy, short- and long-term business operations and objectives, and financial needs.
These forward-looking statements are subject to a number of risks, uncertainties and assumptions that may cause actual results to differ materially, including: the risk that the companies respective businesses will suffer due to uncertainty related to the Acquisition; difficulties encountered in integrating merged businesses, including employee, customer, supplier and product difficulties; costs related to the Acquisition; general market and business conditions; and unanticipated impact of accounting for the Acquisition. Forward-looking statements are subject to a