Gartner, Inc. (NYSE:IT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.
On April 5, 2017, Gartner, Inc., a Delaware corporation (Gartner)
and certain of its subsidiaries, entered into an agreement among
Gartner, as borrower, such subsidiaries, as guarantors, the
lenders party thereto and JPMorgan Chase Bank, N.A., as
administrative agent (the Administrative Agent, and such
agreement, the Amendment), which amended Gartners existing credit
facility, dated as of June 17, 2016, among Gartner, the several
lenders party thereto and the Administrative Agent (as amended by
the First Amendment, dated as of January 20, 2017, and the Second
Amendment, dated as of March 20, 2017, the Existing Credit
Agreement) in connection with the consummation of the
transactions contemplated by the Agreement and Plan of Merger, by
and among Gartner, Cobra Acquisition Corp., a Delaware
corporation and wholly owned subsidiary (Merger Sub) and CEB
Inc., a Delaware corporation (CEB), as previously disclosed in
Gartners Current Report on Form 8-K filed with the SEC on January
5, 2017 and as further described in Item 2.01 of this Current
Report on Form 8-K (the Merger).
The Amendment increased the aggregate principal amount of
Gartners term loan A facility by $900 million and added an
incremental tranche term loan B facility in an aggregate
principal amount of $500 million. Immediately upon entry into the
Amendment, Gartner drew down $900 million under the increased
term loan A facility and $500 million under the term loan B
facility and made an additional draw of $275 million on its
existing revolving credit facility to fund a portion of the costs
associated with the Merger.
The additional amount drawn under the term loan A facility has
the same maturity date and is subject to the same interest,
repayment terms, amortization schedules, representations and
warranties, affirmative and negative covenants and events of
default as the amount outstanding under such facility prior to
entry by Gartner into the Amendment.
The term loan B facility will mature on April 5, 2024. Amounts
outstanding thereunder will bear interest at a rate per annum
equal to, at the option of Gartner, (1) adjusted LIBOR plus 2.00%
or (2) an alternate base rate plus 1.00%.
The term loan B facility contains representations and warranties,
affirmative and negative covenants and events of default that are
the same as the term loan A facility and revolving credit
facility, except that a breach of financial maintenance covenants
will not result in an event of default under the term loan B
facility unless the lenders under the revolving credit facility
and term loan A facility have accelerated the revolving loans and
term loan A loans and terminated their commitments thereunder.
Additionally, the term loan B facility includes mandatory
prepayment requirements related to asset sales (subject to
reinvestment), debt incurrence (other than permitted debt) and
excess cash flow, subject to certain limitations described
therein. Any voluntary prepayment of the term loan B facility
made in connection with a repricing transaction in the first six
months following April 5, 2017 will be subject to a 1.00%
prepayment premium.
Other than as specifically provided in the Amendment and as
stated therein, the Amendment had no effect on any schedules,
exhibits or attachments to the Existing Credit Agreement or the
Guarantee and Collateral Agreement, dated as of June 17, 2016,
(as amended by the First Amendment, dated as of January 20, 2017,
and the Second Amendment, dated as of March 20, 2017 and
supplemented by the Assumption Agreement (as described below),
the Guarantee and Collateral Agreement), which remain in effect
without any amendment or modification thereto.
Upon effectiveness of the Merger, CEB and certain of its material
subsidiaries entered into an Assumption Agreement, dated April 5,
2017, in favor of the Administrative Agent on behalf of the
lenders under the Existing Credit Agreement (the Assumption
Agreement) to which CEB and such subsidiaries became additional
guarantors of Gartners obligations under the Existing Credit
Facility.
Also on April 5, 2017 and in connection with the closing of the
Merger, Gartner and certain of its subsidiaries (including CEB
and certain of its material subsidiaries) entered into an
agreement among Gartner, as borrower, such subsidiaries, as
guarantors, the lenders party thereto and JPMorgan Chase Bank,
N.A., as administrative agent (the 364-Day Facility), for a
senior unsecured 364-day bridge credit facility in an aggregate
principal
amount of $300 million, which amount was immediately drawn by
Gartner to fund a portion of the costs associated with the
Merger.
The 364-day Bridge Facility will mature on the 364th day after
the closing date of the Merger. Amounts outstanding under the
364-day Bridge Facility will bear interest at a rate per annum
equal to, at the option of Gartner, (1) adjusted LIBOR plus 2.75%
or (2) an alternate base rate plus 1.75%, with the margins on
both increasing by 0.25% 180 days after the closing date of the
Merger and an additional 0.25% each 90 days thereafter.
The 364-day Bridge Facility contains representations and
warranties, affirmative and negative covenants and events of
default that are substantially the same as in the Existing Credit
Agreement. Additionally, the 364-Day Facility includes mandatory
prepayment requirements related to the receipt by Gartner of
repatriated funds from its foreign subsidiaries, subject to
certain exceptions and reduced by any taxes payable or reasonably
estimated by Gartner to be payable upon such repatriation and
proceeds from certain debt (excluding the other debt incurred in
connection with the Merger) and equity issuances.
Gartners proceeds from the loans under both the Amendment and the
364-Day Facility were applied to finance, in part, the Merger,
repay certain outstanding indebtedness of CEB and pay the fees,
expenses and costs incurred by Gartner and CEB in connection with
the Merger.
The foregoing descriptions of the Amendment and the 364-Day
Facility do not purport to be complete and are respectively
qualified in entirety by reference to the Amendment, which is
attached as Exhibit 10.1 to this Current Report on Form 8-K and
incorporated by reference herein, and the 364-Day Facility, which
is attached as Exhibit 10.2 to this Current Report on Form 8-K
and incorporated by reference herein.
Item 2.01. Completion of Acquisition or Disposition of Assets.
As previously disclosed in the Current Report on Form 8-K filed
with the SEC on January 5, 2017, Gartner, CEB and Merger Sub,
entered into an Agreement and Plan of Merger on January 5, 2017
(the Merger Agreement). This Current Report on Form 8-K is being
filed in connection with the consummation of the transactions
contemplated by the Merger Agreement.
On April 5, 2017, Gartner consummated the Merger, whereby Merger
Sub merged with and into CEB, with CEB as the surviving
corporation and a wholly owned subsidiary of Gartner. At the
Effective Time (as defined in the Merger Agreement) each share of
CEB common stock issued and outstanding immediately prior to the
consummation of the Merger, except for (i)shares of CEB common
stock as to which the holders thereof have not voted in favor of
the Merger or consented to the Merger in writing and have
demanded appraisal for such shares in accordance with Section262
of the Delaware General Corporation Law and have not effectively
withdrawn or lost their rights to appraisal and (ii)shares of CEB
common stock owned by CEB as treasury stock or owned by Gartner
or Merger Sub, will be converted into the right to receive, less
any applicable withholding taxes, (a)$54.00 in cash and (b)0.2284
of a share of Gartner common stock (clauses (a) and (b) together,
the Merger Consideration. CEB stockholders will not receive any
fractional shares of Gartner common stock and will instead
receive cash in lieu of any such fractional shares of Gartner
common stock, to the terms of the Merger Agreement.
Including Gartners assumption of approximately $0.7 billion in
CEB net debt, the transaction has a total enterprise value of
approximately $3.3 billion.
The foregoing description of the terms set forth in the Merger
Agreement is qualified in its entirety by reference to the Merger
Agreement, a copy of which was attached as Annex A to the
Registration Statement on Form S-4 filed with the Securities and
Exchange Commission on February 6, 2017, as amended on February
22, 2017.
Item 2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement of a
Registrant.
The information in Item 1.01 regarding the Amendment and the
364-Day Bridge Agreement is incorporated herein by reference.
Item 7.01. Regulation FD Disclosure
On April 6, 2017, Gartner issued a press release announcing the
consummation of the Merger, a copy of which is furnished as
Exhibit 99.2 hereto.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired.
The financial statements of CEB required by this item were
previously filed and incorporated by reference in Gartners
Registration Statement on Form S-4 filed with the Securities and
Exchange Commission on February 6, 2017, and amended on March 6,
2017.
(b) Pro Forma Financial Information.
The pro forma financial information required by this item is
filed as Exhibit 99.1 to this Current Report on Form 8-K
(c) Exhibits
| Exhibit No. | Description |
| 10.1 |
Incremental Amendment, dated as of April 5, 2017, among Gartner, Inc., each other Loan Party party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. |
| 10.2 |
364-Day Bridge Credit Agreement, dated as of April 5, 2017, among Gartner, Inc., each other Loan Party party thereto, the Lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent. |
| 99.1 |
Unaudited pro forma condensed consolidated financial information of Gartner, Inc. and CEB Inc. |
| 99.2 | Press Release, dated April 6, 2017. |
This Current Report contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.
Forward-looking statements generally relate to future events or
Gartners future financial or operating performance. In some
cases, you can identify forward-looking statements because they
contain words such as may, will, expects, plans, works to,
estimates, or continue or the negative of these words or other
similar terms or expressions, and include the assumptions that
underlie such statements. These forward-looking statements
concern Gartners expectations, strategy, plans or intentions.
Gartners expectations and beliefs regarding these matters may not
materialize, and actual results in future periods are subject to
risks and uncertainties that could cause actual results to differ
materially from those projected, including but not limited to:
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the risk that the businesses will not be integrated successfully; |
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the risk that synergies will not be realized or realized to the extent anticipated; |
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uncertainty as to the market value of the Gartner merger consideration to be paid in the Merger; |
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the risk that, following the Merger, Gartner will not realize its financing or operating strategies; |
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| litigation in respect of either company or the Merger; and | ||
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disruption from the Merger making it more difficult to maintain certain strategic relationships. |
The forward-looking statements contained in this Current Report
are also subject to other risks and uncertainties, including
those more fully described in Gartners filings with the
Securities and Exchange Commission (SEC), including Gartners
Annual Report on Form 10-K for the year ended December 31, 2016,
which was filed with the SEC on February 22, 2017 and those
discussed in Risk Factors in the Registration Statement on Form
S-4, which was filed with the SEC on February 6, 2017 and amended
on March 6, 2017 and in the documents which are incorporated by
reference therein. The forward-looking statements in this Current
Report are based on information available to Gartner as of the
date hereof, and Gartner disclaims any obligation to update any
forward-looking statements, except as required by law.
About Gartner, Inc. (NYSE:IT)
Gartner, Inc. is an information technology research and advisory company. The Company works with clients to research, analyze and interpret the business of information technology (IT) within the context of their individual roles. The Company operates through three segments: Research, which provides objective insight on technology and supply chain initiatives for chief information officers (CIOs) and other IT professionals, supply chain professionals, digital marketing and other business professionals, as well as technology companies and the institutional investment community, through reports, briefings, tools, access to its analysts, peer networking services and membership programs that enable its clients to make decisions about their IT, supply chain and digital marketing initiatives; Consulting, which consists primarily of consulting, measurement engagements and strategic advisory services, and Events, which consists of various symposia, conferences and exhibitions. Gartner, Inc. (NYSE:IT) Recent Trading Information
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