ORBCOMM Inc. (NASDAQ:ORBC) Files An 8-K Entry into a Material Definitive Agreement
Item1.01. Entry into a Material Definitive Agreement.
On June9, 2017, ORBCOMM Inc. (ORBCOMM) entered into, and
consummated the transactions contemplated by, an Asset Purchase
Agreement (the Asset Purchase Agreement) by and among ORBCOMM,
Snowboard Holdings, LLC, a Delaware limited liability company and
wholly-owned subsidiary of ORBCOMM (Purchaser), inthinc, inc., a
Delaware corporation (Inthinc), inthinc Technology Solutions,
Inc., a Delaware corporation (ITS), tiwi, inc., a Delaware
corporation (Tiwi), inthinc Telematics, Inc., a Canada
corporation (Telematics), DriveAware, Inc., a Delaware
corporation (DriveAware), and inthinc Chile, SPA, a Chile company
(Chile; Inthinc, ITS, Tiwi, Telematics, DriveAware, and Chile are
collectively referred to as the Sellers), and inthinc Investors,
L.P., a Delaware limited partnership, in its capacity as
Stockholder Representative.
to the Asset Purchase Agreement, the Purchaser purchased
substantially all of the assets, and assumed certain liabilities,
of each of the Sellers, and ORBCOMM has guaranteed the payment
and performance of the Purchasers obligations under the Asset
Purchase Agreement.
Consideration Paid
The aggregate consideration paid by Purchaser at the closing was
thirty five million dollars ($35,000,000) (the Closing
Consideration), subject to adjustment for working capital.
$34,235,878 of the Closing Consideration was paid in cash and the
remaining $764,122 was paid through the issuance of 76,796 shares
of ORBCOMM common stock based on the twenty day trailing average
closing price of ORBCOMM common stock ending on June8, 2017.
In addition to the Closing Consideration, contingent
consideration of up to twenty five million dollars ($25,000,000)
(the Earn-Out) is payable by Purchaser to Inthinc over a two year
period based on a two times multiple of incremental GAAP Service
Revenues in excess of $17,500,000 as described in the Asset
Purchase Agreement.
The Earn-Out may be payable at ORBCOMMs option entirely in
ORBCOMM common stock or in any combination of ORBCOMM common
stock and cash. If paid in stock, the number of shares of ORBCOMM
common stock to be issued to the Sellers will be based upon the
volume-weighted average trading price of ORBCOMM common stock on
the Nasdaq Stock Market, LLC for the twenty (20)trading days
ending on (and inclusive of) the trading day that is the third
full trading day prior to (and not inclusive of) the final
determination of the applicable earnout statement.
Representations, Warranties and Covenants
The Asset Purchase Agreement contains customary representations,
warranties and covenants. The representations and warranties
generally survive the closing for fifteen months. Purchaser also
obtained an insurance policy to cover losses from any breaches of
representations by the Sellers under the Asset Purchase
Agreement. The policy limit is $5,000,000 and the retention is
$500,000.
2
The foregoing description of the Asset Purchase Agreement is
qualified in its entirety by reference to the full text of the
Asset Purchase Agreement, a copy of which is filed as Exhibit
99.1 to this Current Report on Form 8-K (this Report).
Item2.01. Completion of Acquisition or Disposition of
Assets.
The information included in Item 1.01 of this Report is
incorporated herein by reference.
Item3.02. Unregistered Sales of Equity
Securities.
The information included in Item 1.01 of this Report relating to
the issuance of ORBCOMM common stock as part of the Closing
Consideration and the potential issuances of ORBCOMM common stock
as part of the Earn-Out are incorporated herein by reference.
The issuances of ORBCOMM common stock under the Asset Purchase
Agreement are exempt from registration under the Securities Act
of 1933 to Section4(2) thereof.
Item8.01 Other Events
On June12, 2017, ORBCOMM issued a press release announcing the
entry into the Asset Purchase Agreement and the consummation of
transactions contemplated thereby, a copy of which is filed as
Exhibit 99.2 to this Report and incorporated herein by reference.
Item9.01 Financial Statements and Exhibits
| 99.1 | Press release of ORBCOMM Inc. dated June12, 2017. |
| 99.2 |
Asset Purchase Agreement dated June9, 2017 among ORBCOMM, Purchaser, the Sellers and inthinc Investors, L.P., in its capacity as Stockholder Representative. |
3
About ORBCOMM Inc. (NASDAQ:ORBC)
ORBCOMM Inc. is a provider of machine-to-machine (M2M) solutions, including network connectivity, devices and Web reporting applications. The Company’s M2M products and services are designed to track, monitor and manage security for a range of assets, such as trailers, trucks, rail cars, intermodal containers, generators, fluid tanks, marine vessels, diesel or electric powered generators (gensets), oil and gas wells, pipeline monitoring equipment, irrigation control systems, and utility meters, in the transportation and distribution, heavy equipment, oil and gas, maritime and government industries. It provides Automatic Identification System (AIS) data services to assist in vessel navigation and to improve maritime safety to government and commercial customers across the world. The Company provides its services using various network platforms, including its own constellation of approximately 40 low-Earth orbit (LEO) satellites and its accompanying ground infrastructure.
