PAREXEL INTERNATIONAL CORPORATION (NASDAQ:PRXL) Files An 8-K Entry into a Material Definitive AgreementItem 1.01. Entry into a Material Definitive Agreement.
| • | make investments, loans and advances; |
| • | enter into certain transactions with affiliates; |
| • | enter into agreements which limit our ability and the ability of our restricted subsidiaries to incur restrictions on their ability to make distributions; and |
| • | enter into amendments to certain subordinated indebtedness in a manner materially adverse to the lenders. |
The New Senior Secured Credit Facilities contain a springing financial covenant requiring compliance with a maximum ratio of first lien net indebtedness to consolidated EBITDA of 7.75:1.00, applicable solely to the New Revolving Facility. The financial covenant will be tested on the last day of any fiscal quarter (commencing with the first full fiscal quarter after the closing date of the Merger) only if the aggregate principal amount of borrowings under the New Revolving Facility (including swingline loans) and certain outstanding letters of credit (except to the extent such letters of credit have been cash collateralized or satisfactorily backstopped and excluding any non-cash collateralized or backstopped letters of credit up to $35.0million in the aggregate), exceeds 35% of the total amount of commitments under the New Revolving Facility on such day.
The New Senior Secured Credit Facilities will also contain certain customary affirmative covenants and events of default for facilities of this type, including relating to a change of control. If an event of default occurs, the lenders under the New Senior Secured Credit Facilities will be entitled to take various actions, including the acceleration of amounts due under the New Senior Secured Credit Facilities and all actions permitted to be taken by secured creditors.
Item 1.01 Termination of a Material Definitive Agreement.
Note Purchase Agreement. On September27, 2017, the Company issued a notice of prepayment to holders of the Company’s 3.11% Senior Notes due 2020 (the “Existing Notes”), to the note purchase agreement, dated as of June25, 2013 (as amended, restated, supplemented or otherwise modified through the date hereof, the “Note Purchase Agreement”), among the Company and the purchasers listed in Schedule A thereto to prepay the entire outstanding principal amount of $100,000,000 of its Existing Notes on September29, 2017, at a prepayment price of $103,336,059.12. On September29, 2017, in connection with the consummation of the Merger, the Company prepaid the Existing Notes to the Note Purchase Agreement.
Third Amended and Restated Credit Agreement. The Company delivered a notice of prepayment and termination to the third amended and restated credit agreement, dated as of March11, 2016 (as amended, restated, supplemented or otherwise modified through the date hereof, the “Credit Agreement”), among the Company, certain subsidiaries, the subsidiary guarantors party thereto and Bank of America, N.A., as administrative agent, swing line lender and L/C issuer, to prepay the aggregate outstanding amount of loans thereunder and terminate the outstanding revolving commitments thereunder. On September29, 2017, in connection with the consummation of the Merger, the Company prepaid the aggregate outstanding amount of existing loans and terminated the outstanding revolving commitments under the Credit Agreement.
Item 1.01 Completion of Acquisition or Disposition of Assets.
On September29, 2017 (the “Closing Date”), to the Agreement and Plan of Merger (the “Merger Agreement”), dated as of June19, 2017, by and among the Company, Parent, and Merger Sub, Merger Sub merged with and into the Company (the “Merger”), with the Company surviving the Merger as a wholly-owned subsidiary of Parent. Parent and Merger Sub were formed by affiliates of the Sponsor.
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The Merger became effective at 10:32 a.m. (Eastern time) on the Closing Date, and at such time (the “Effective Time”), each share of the Company’s common stock, par value $0.01 per share (the “Common Stock”), issued and outstanding immediately prior to the Effective Time (other than shares owned by Parent or Merger Sub (or their respective affiliates) or shares of Company common stock held by a shareholder who has properly exercised, and has not failed to perfect, withdraw, waive or otherwise lose, appraisal rights in accordance with Massachusetts law) will be automatically canceled and converted into the right to receive $88.10 in cash, without interest and less applicable withholding taxes (the “Merger Consideration”).
The foregoing description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with the Securities and Exchange Commission (the “SEC”) on June20, 2017, and is incorporated by reference into this Item 1.01.
The disclosure regarding the Merger and the Merger Agreement set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 1.01 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of Registrant.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
Item 1.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
In connection with the closing of the Merger, the Company notified NASDAQ on the Closing Date that the certificate of merger had been filed with the Secretary of State of the Commonwealth of Massachusetts and that, at the Effective Time, each outstanding share of Common Stock (other than the excluded shares) was cancelled and converted into the right to receive the Merger Consideration. In addition, the Company requested that NASDAQ delist the Common Stock at the close of business on September29, 2017, and as a result, trading of Common Stock, which previously traded under the ticker symbol “PRXL” on NASDAQ, was suspended after the closing of NASDAQ on September29, 2017. The Company also requested that NASDAQ file a notification of removal from listing and registration on Form 25 with the SEC to effect the delisting of the Common Stock from NASDAQ and the deregistration of the Common Stock under Section12(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The Company intends to file a Form 15 with the SEC requesting the termination of registration of the Common Stock under Section12(g) of the Exchange Act and the suspension of reporting obligations under Sections 13 and 15(d) of the Exchange Act.
Item 1.01 Material Modification to Rights of Security Holders.
The information set forth under Items 2.01, 3.01, 5.02 and 5.03 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
At the Effective Time, each holder of shares of Common Stock issued and outstanding immediately prior to the Effective Time ceased to have any rights as stockholders of the Company (other than the right (except in the case of excluded shares) to receive the Merger Consideration).
Item 1.01 Changes in Control of Registrant.
The information set forth under Items 2.01 and 5.02 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
As a result of the Merger, a change in control of the Company occurred, and the Company is now a wholly-owned subsidiary of Parent. Parent is affiliated with, and controlled by, investment funds advised by the Sponsor.
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The total amount of funds used by Parent to complete the Merger and related transactions and pay related fees and expenses was approximately $5.5billion, which was funded through a combination of common equity contributions by investment funds affiliated with Sponsor, cash from the Company and/or its subsidiaries and proceeds from the new debt financing described in Item 1.01.
The description of the Merger and the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the Merger Agreement, which was filed as Exhibit 2.1 to the Current Report on Form 8-K filed by the Company with the SEC on June20, 2017, and is incorporated by reference into this Item 1.01.
Item 1.01 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
Directors
Effective upon completion of the Merger, in accordance with the Merger Agreement, Jeremy Gelber, who was the director of Merger Sub, became director of the Company. As a result of the Merger and in accordance with the Merger Agreement, A. Dana Callow, Patrick J. Fortune, Ph.D, Maykin Ho, Ph.D, Eduard E. Holdener, M.D., Christopher J. Lindop, Richard L. Love and Ellen M. Zane are no longer directors (or members of any committees of the board of directors) of the Company. Immediately following the Merger, Josef H. von Rickenbach was appointed to continue as director of the Company.
Officers
Effective upon completion of the Merger, the following persons will continue to be officers of the Company: Josef von Rickenbach, Mark A. Goldberg, Simon Harford, Douglas A. Batt, Christian Dreger, Xavier Flinois, David Godwin, Michelle Graham, Sy Pretorius, Gadi Saarony, Joshua Schultz, Peter Rietman and W. Brett Davis.
Item 1.01 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01.
In accordance with the Merger Agreement, at the Effective Time, the articles of organization of the Company, as in effect immediately prior to the Effective Time, were amended and restated in its entirety. A copy of the amended and restated articles of organization is attached as Exhibit 3.1 hereto and is incorporated herein by reference.
In accordance with the Merger Agreement, at the Effective Time, the amended and restated bylaws of Merger Sub became the bylaws of the Company. A copy of the bylaws is attached as Exhibit 3.2 hereto and is incorporated herein by reference.
Item 1.01 Regulation FD Disclosure.
On the Closing Date, the Company issued a press release announcing the completion of the Merger. A copy of the press release is furnished as Exhibit 99.1 hereto. Such press release shall not be deemed “filed” for purposes of Section18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
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Item 1.01 Financial Statements and Exhibits.
(d) Exhibits.
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PAREXEL INTERNATIONAL CORP ExhibitEX-3.1 2 d465063dex31.htm EX-3.1 EX-3.1 Exhibit 3.1 D PC The Commonwealth of Massachusetts William Francis Galvin Secretary of the Commonwealth One Ashburton Place,…To view the full exhibit click here
About PAREXEL INTERNATIONAL CORPORATION (NASDAQ:PRXL)
PAREXEL International Corporation (PAREXEL) is a biopharmaceutical outsourcing services company. The Company provides a range of expertise in clinical research, clinical logistics, medical communications, consulting, commercialization, and technology products and services to pharmaceutical, biotechnology and medical device industries. Its segments include Clinical Research Services (CRS), PAREXEL Consulting Services (PC) and PAREXEL Informatics (PI). The CRS segment includes various phases of clinical research from first-in-man trials, where a medicinal entity is tested on human subjects for the first time, through post-marketing studies, following approval by the presiding regulatory body. The PC segment provides technical expertise and advice in areas, such as strategy, drug development, regulatory affairs, strategic compliance and targeted communications services in support of product launch. The Company’s PI segment provides information technology solutions.
