EXAR CORPORATION (NYSE:EXAR) Files An 8-K Entry into a Material Definitive Agreement
Item1.01. Entry into a Material Definitive Agreement.
Merger Agreement
On March28, 2017, Exar Corporation (Exar) entered into an
Agreement and Plan of Merger (the Merger Agreement) with
MaxLinear, Inc., a Delaware corporation (MaxLinear), and Eagle
Acquisition Corporation, a Delaware corporation and a
wholly-owned subsidiary of MaxLinear (Merger Sub). The Merger
Agreement provides that, subject to the terms of the Merger
Agreement, Merger Sub will commence a tender offer (the Offer) to
purchase all of the outstanding shares of the common stock of
Exar, par value $0.0001 per share (the Shares), at a price of
$13.00 per share (the Offer Price), without interest and subject
to any required withholding taxes.
Consummation of the Offer is subject to various conditions set
forth in the Merger Agreement, including, but not limited to (i)
a number of Shares shall have been validly tendered in the Offer
that represent one more than 50% of the sum of (a) all then
outstanding Shares plus (b) the number of Shares underlying all
then outstanding vested options to purchase Shares plus (c) the
number of Shares issuable upon settlement of all then outstanding
Exar restricted stock units (excluding Shares tendered to
guaranteed delivery procedures that have not yet been received,
as such term is defined in Section 251(h) of the DGCL, by the
depositary for the Offer to such procedures), (ii) the expiration
of the waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, (iii) the accuracy of Exars
representations and warranties (subject to certain materiality
qualifiers), (iv)Exars performance or compliance with in all
material respects all covenants and obligations that it is
required to comply with or perform under the Merger Agreement
prior to the scheduled expiration of the Offer, and (v) other
conditions set forth in Annex A to the Merger Agreement.
The Offer will expire at midnight, on the 20th business day
(calculated in accordance with the rules of the Securities
Exchange Act of 1934) following the commencement date of the
Offer unless extended in accordance with the terms of the Offer
and the Merger Agreement and the applicable rules and regulations
of the United States Securities and Exchange Commission (the
SEC).
Following consummation of the Offer, Merger Sub will merge with
and into Exar with Exar surviving as a wholly-owned subsidiary of
MaxLinear (the Merger). The Merger Agreement provides that the
Merger will be governed by Section 251(h) of the Delaware General
Corporation Law (the DGCL) and shall be effected by Merger Sub
and Exar as soon as practicable following the consummation of the
Offer without a stockholder meeting to the DGCL.
At the time the Merger is consummated (the Effective Time), each
Share issued and outstanding as of immediately prior to the
Effective Time (other than Shares held in treasury by Exar,
Shares owned by MaxLinear or any of its subsidiaries, and Shares
owned by stockholders who have properly exercised and perfected
appraisal rights under Delaware law) will be cancelled and
extinguished and automatically converted into the right to
receive cash in an amount equal to the Offer Price, without
interest thereon.
Each outstanding and vested option to purchase Shares with an
exercise price less than the Offer Price will be cancelled and
automatically converted into the right to receive a cash payment,
without interest and subject to applicable tax withholding, equal
to the product of (x) the total number of Shares subject to such
option, multiplied by (y) the amount by which the Offer Price
exceeds the exercise price per share of such option. Each
outstanding option that is subject to time-based vesting and is
unvested, or, that is vested and has an exercise price greater
than or equal to the Offer Price, and are held by continuing
service providers, will be assumed by MaxLinear and converted
into an option to purchase an adjusted number of shares of Class
A Common Stock of MaxLinear, at an adjusted exercise price, but
otherwise with the same terms and conditions, including vesting,
that applied prior to the Merger. At the Effective Time, each
then-outstanding and unvested restricted stock unit and
performance stock unit that is subject solely to time-based
vesting (or otherwise becomes subject to time-based vesting in
accordance with the Merger Agreement,) and is held by a
continuing service provider will be assumed by MaxLinear and
converted into an award to acquire an adjusted number of shares
of Class A Common Stock of MaxLinear, but otherwise with the same
terms and conditions, including vesting, that applied to the
award prior to the Merger. Awards with performance-based vesting,
performance options and performance stock units with performance
periods ending on or before the end of fiscal 2017 will vest to
the extent the applicable performance criteria is achieved or the
awards otherwise vest to a separate agreement. Performance
options and performance stock units with performance periods
ending in fiscal 2018 and beyond will be assumed for an adjusted
number of shares of Class A Common Stock of MaxLinear, at an
adjusted exercise price (if applicable), with performance deemed
achieved at target as of the Merger. Following the Merger, such
assumed awards will vest over their original time-based vesting
schedule.
The consummation of the Merger is subject to the following
conditions: (i)Merger Sub shall have accepted for payment all
of the Shares validly tendered to the Offer and not validly
withdrawn and (ii)the absence of any law or order restraining,
enjoining or otherwise prohibiting the Merger.
MaxLinear has delivered to Exar a commitment letter entered
into by MaxLinear with financial institutions with respect to
its debt financing, the proceeds of which will be used by
MaxLinear to fund a portion of the consideration to be paid in
the Offer and the Merger (the Debt Financing). The availability
of the Debt Financing or other financing is not a condition to
the consummation of the Offer or the Merger.
The Merger Agreement contains customary representations and
warranties by Exar, MaxLinear and Merger Sub. The Merger
Agreement also contains customary covenants and agreements,
including with respect to the operations of the business of
Exar and its subsidiaries between signing and closing,
governmental filings and approvals and other matters.
Exar has agreed to customary restrictions on the operations of
its business refrain from engaging in certain activities until
the Effective Time of the Merger. In addition, under the terms
of the Merger Agreement, Exar agrees not to solicit or support
any alternative acquisition proposals, subject to customary
exceptions for Exar to respond to and support unsolicited
proposals in the exercise of the fiduciary duties of the board
of directors of Exar. Notwithstanding this limitation, Exar may
under certain circumstances provide information to and
participate in discussions or negotiations with third parties
with respect to an unsolicited alternative transaction proposal
that its board of directors has determined in good faith
constitutes or is reasonably likely to lead to a superior
proposal. Exars board of directors may change its
recommendation to its stockholders (subject to MaxLinears right
to terminate the Merger Agreement following such change in
recommendation) in response to a superior proposal or an
intervening event if Exars board of directors determines in
good faith that the failure to take such action would be
reasonably likely to constitute a breach of its fiduciary
duties under Delaware law.
The Merger Agreement contains termination rights for each of
MaxLinear, Merger Sub and Exar, and further provides that upon
termination of the Merger Agreement under specified
circumstances, Exar may be required to pay MaxLinear a
termination fee equal to $24,800,000 as well as up to
$3,000,000 of MaxLinears documented out-of-pocket expenses
associated with the transactions contemplated by the Merger
Agreement.
The foregoing description of the Merger Agreement and the
transactions contemplated thereby does not purport to be
complete and is subject to, and qualified in its entirety by
reference to, the full text of the Merger Agreement, which is
attached as Exhibit 2.1 and is incorporated herein by
reference.
The Merger Agreement contains representations and warranties by
each of MaxLinear, Merger Sub and Exar. These representations
and warranties were made solely for the benefit of the parties
to the Merger Agreement and:
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should not be treated as categorical statements of fact, |
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may have been qualified in the Merger Agreement by |
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may apply contractual standards of materiality that are |
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were made only as of the date of the Merger Agreement or |
Support Agreement
Concurrently with the execution of the Merger Agreement, Key
Stockholders (as defined in the Merger Agreement and
including Exars directors and executive officers) of Exar,
who together own approximately 20% of the total Shares
outstanding on the date of the Merger Agreement, entered into
a Support Agreement with MaxLinear (each a Support
Agreement), to which such Key Stockholders have agreed, among
other things, to tender their shares in the Offer and, if
required, vote their respective shares against any
alternative proposal and against any action or agreement that
would reasonably be expected to impede, interfere with,
delay, discourage, adversely affect or inhibit the timely
consummation of, the Offer, the Merger, or the other
transactions contemplated by the Merger Agreement.The Support
Agreements will terminate upon certain specified events,
including termination of the Merger Agreement.
The foregoing description of the Support Agreements does not
purport to be complete and is subject to, and qualified in
its entirety by, the full text of the Support Agreements,
which are attached as Exhibit99.1 and Exhibit 99.2 hereto and
incorporated herein by reference.
Item8.01. Other Information.
On March29, 2017, Exar and MaxLinear issued a joint press
release announcing the execution of the Merger Agreement, a
copy of which is attached hereto as Exhibit99.3 and is
incorporated herein by reference.
Additional Information and Where to Find It
In connection with the proposed merger, MaxLinear and its
subsidiary will commence the Offer and file a Tender Offer
Statement on Schedule TO with the SEC, and Exar will file a
Solicitation/Recommendation Statement on Schedule 14D-9 with
the SEC. EXAR STOCKHOLDERS AND OTHER INVESTORS ARE URGED TO
READ THE OFFER MATERIALS (INCLUDING THE OFFER TO PURCHASE,
RELATED LETTER OF TRANSMITTAL, AND CERTAIN OTHER OFFER
DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT,
INCLUDING ALL AMENDMENTS TO THOSE MATERIALS. SUCH DOCUMENTS
WILL CONTAIN IMPORTANT INFORMATION, WHICH SHOULD BE READ
CAREFULLY BEFORE ANY DECISION IS MADE WITH RESPECT TO THE
TENDER OFFER. The Tender Offer Statement and the
Solicitation/Recommendation Statement will be available
without charge at the SECs website at www.sec.gov. Free
copies of these materials and certain other offering
documents will be sent to Exars stockholders by the
information agent for the Offer. These documents may also be
obtained for free by contacting MaxLinear Investor Relations
at http://investors.maxlinear.com/, at [email protected] or by
telephone at (760) 517-1112 or by contacting Exar Investor
Relations at [email protected] or by telephone at
(510) 668-7201. The contents of the websites referenced above
are not deemed to be incorporated by reference into the Offer
documents.
Forward-Looking Statements
This communication contains forward-looking statements within
the meaning of the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, including
statements with respect to the potential benefits of the
proposed tender offer and merger and the anticipated timing
of the proposed tender offer and merger. These statements are
based on managements current expectations and beliefs and are
subject to a number of factors and uncertainties that could
cause actual results to differ materially from those
described in the forward-looking statements. Forward-looking
statements may contain words such as will be, will, expected,
anticipate, continue, or similar expressions and include the
assumptions that underlie such statements. The following
factors, among others, could cause actual results to differ
materially from those described in the forward-looking
statements: risks related to the satisfaction of the
conditions to closing of the tender offer and merger
(including the failure to obtain necessary regulatory
approvals) in the anticipated timeframe or at all, including
uncertainties as to whether a sufficient number of Exar
stockholders tender their shares in connection with the
tender offer and the possibility that the tender offer or
merger do not close; and other factors affecting the
business, operating results, and financial condition of
either MaxLinear or Exar, including those set forth in the
most recent Annual Reports on Form 10-K, Quarterly Reports on
Form 10-Q, and Current Reports on Form 8-K reports filed by
MaxLinear and Exar, as applicable, with the SEC. All
forward-looking statements are based on the estimates,
projections, and assumptions of MaxLinear or Exar management,
as applicable, as of the date hereof, and MaxLinear and Exar
are under no obligation (and expressly disclaim any such
obligation) to update or revise any forward-looking
statements whether as a result of new information, future
events, or otherwise.
Item9.01 Financial Statements and Exhibits
Exhibits
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2.1 |
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Agreement and Plan of Merger, dated as of March28, |
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99.1 |
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Form of Support Agreement by and between MaxLinear, |
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99.2 |
Support Agreement by and between MaxLinear, Inc. and |
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99.3 |
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Joint Press release issued by MaxLinear, Inc. and |
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Schedules have been omitted to Item 601(b)(2) of |
to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
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EXAR CORPORATION |
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Date: March29, 2017 |
By: |
/s/ Ryan A. Benton |
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Ryan A. Benton |
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Chief Executive Officer |
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EXHIBIT INDEX
| ItemNo. | Description | |||
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2.1 |
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Agreement and Plan of Merger, dated as of |
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99.1 |
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Form of Support Agreement by and between |
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99.2 |
Support Agreement by and between MaxLinear, Inc. |
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99.3 |
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Joint Press release issued by MaxLinear, Inc. and |
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* |
Schedules have been omitted |
About EXAR CORPORATION (NYSE:EXAR)
Exar Corporation (Exar) designs, develops and markets analog mixed-signal integrated circuits (ICs) and sub-system solutions. The Company’s products are deployed in a range of applications, such as industrial, instrumentation and medical equipment, networking and telecommunication systems, servers, enterprise storage systems, flat panel displays, light emitting diode (LED) lighting solutions, set top boxes and digital video recorders. Exar’s product portfolio includes connectivity, power management, high performance analog, communications, processors, flat panel display and LED lighting. The Company designs and develops amplifiers and data converters that support a range of signal path and conditioning needs of networking, industrial control and embedded applications. The Company markets its products to three primary markets, such as industrial and embedded systems, consumer and infrastructure. EXAR CORPORATION (NYSE:EXAR) Recent Trading Information
EXAR CORPORATION (NYSE:EXAR) closed its last trading session 00.00 at 10.62 with 218,936 shares trading hands.
