SEALED AIR CORPORATION (NYSE:SEE) Files An 8-K Entry into a Material Definitive Agreement
Item1.01
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Entry Into a Material Definitive Agreement. |
On March 25, 2017, Sealed Air Corporation (the Company) entered
into a Purchase Agreement (the Purchase Agreement) with Diamond
(BC) B.V. (Buyer), a newly formed entity affiliated with Bain
Capital Private Equity (the Sponsor). On the terms and subject to
the conditions set forth in the Purchase Agreement, Buyer has
agreed to purchase the Companys Diversey Care division and the
food hygiene and cleaning business within the Companys Food Care
division (collectively, the Diversey Business) for $3.2 billion
in cash (subject to certain adjustments set forth in the Purchase
Agreement).
The Purchase Agreement contains various representations,
warranties, and covenants by each party, including, among others,
covenants with respect to the conduct of the Diversey Business by
the Company during the period between the execution of the
Purchase Agreement and the completion of the transaction (the
Closing). The Company and Buyer have agreed to use their
respective reasonable best efforts to cause the transaction to be
consummated. In addition, for a period of two (2)years following
the Closing, subject to certain exceptions, the Company and its
affiliates will not engage in certain activities that compete
with the Diversey Business. Further, for a period of one (1)year
following the Closing, the Company and its affiliates will be
subject to certain non-solicitation and non-hire provisions
relating to the Diversey Business, and Buyer and its affiliates
will be subject to certain non-solicitation and non-hire
provisions relating to the Companys retained businesses.
The transaction is subject to certain closing conditions
including, among others, (i)the expiration or early termination
of the applicable waiting period under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended, and the receipt
of required clearances from certain other foreign governmental
antitrust authorities; (ii)the absence of any statute, rule,
regulation, executive order, decree, preliminary or permanent
injunction, or restraining order prohibiting or restricting the
consummation of the transaction; and (iii)the completion of an
internal reorganization of the Company to separate the Diversey
Business therefrom. Each partys obligation to consummate the
transaction is also subject to (1)the accuracy of the other
partys representations and warranties contained in the Purchase
Agreement (subject to certain materiality qualifiers) and (2)the
other partys performance and compliance in all material respects
with its obligations and covenants under the Purchase Agreement.
The closing of the transaction will not occur prior to
September5, 2017, unless the parties otherwise agree.
Either party has the right to terminate the Purchase Agreement
under certain circumstances. Those circumstances include
(i)failure to consummate the transaction by October16, 2017 (the
Outside Date); (ii)material breach by either party that has not
been cured, if curable, within the shorter of thirty (30)days
after notice of such breach and prior to the Outside Date;
(iii)mutual consent; or (iv)as a result of a governmental action
that restrains, enjoins, or otherwise prohibits the transactions
contemplated by the Purchase Agreement.
Buyer is required to pay the Company a termination fee of $208
million if the Purchase Agreement is terminated by the Company
(i)upon a breach by Buyer of any of its representations,
warranties, agreements or covenants set forth in the Purchase
Agreement and such breach renders a closing condition incapable
of satisfaction, and such breach has not been waived and is not
cured by the earlier of thirty (30)days after notice of such
breach or the Outside Date; (ii)if the marketing period for
Buyers financing has ended, all conditions to Buyers obligation
to close have been satisfied, the Company notifies Buyer that it
is ready, willing and able to close, but Buyer fails to
consummate the Closing within three (3)business days after such
notice; and (iii)if the Closing does not occur by the Outside
Date and the Company would be entitled to terminate at such time
as a result of the circumstances stated in clause (i)of this
paragraph.
Buyer has obtained equity commitments from certain funds
affiliated with the Sponsor and debt financing commitments from
Credit Suisse AG, Credit Suisse Securities (USA) LLC, and Goldman
Sachs Bank USA.
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The obligations of Buyer to the Purchase Agreement are not
conditioned on receipt of this financing. However, Buyer is not
required to consummate the transaction until after the completion
of a marketing period for its financing that extends for up to
twenty-two (22)consecutive days following the receipt of certain
financial information from the Company and satisfaction of all
closing conditions. Certain funds affiliated with the Sponsor
have also agreed to guarantee the obligations of Buyer under the
Purchase Agreement to pay the reverse termination fee and
reimbursement obligations that may become payable by the Buyer,
on the terms and subject to the conditions set forth in their
limited guaranty in favor the Company.
Each of the Company and Buyer has agreed to indemnify the other
party for losses arising from certain breaches of the Purchase
Agreement and for certain other liabilities, subject to certain
limitations. In connection with the transaction, the Company and
Buyer (or entities that it will acquire in the transaction) will
also enter into certain additional ancillary agreements,
including a transition services agreement, license agreements
with respect to certain intellectual property of the Diversey
Business and the Company and other commercial agreements.
The foregoing description of the Purchase Agreement is qualified
in its entirety by reference to the full text of the Purchase
Agreement, a copy of which will be filed with the United States
Securities and Exchange Commission as an exhibit to the Quarterly
Report on Form 10-Q to be filed by the Company for the quarterly
period ended March31, 2017 (the First Quarter 10-Q).
The representations, warranties and covenants set forth in the
Purchase Agreement have been made only for the purposes of the
Purchase Agreement and solely for the benefit of the parties
thereto and may be subject to limitations agreed upon by the
contracting parties, including being qualified by confidential
disclosures made for the purposes of allocating contractual risk
between the parties to the Purchase Agreement instead of
establishing such matters as facts. In addition, such
representations and warranties were made only as of the dates
specified in the Purchase Agreement, and information regarding
the subject matter thereof may change after the date of the
Purchase Agreement. Accordingly, the Purchase Agreement will be
filed as an exhibit to the First Quarter 10-Q to provide
investors with information regarding its terms and not to provide
investors with any other factual information regarding the
Company or its businesses (including the Diversey Business) as of
the date of the Purchase Agreement or as of any other date.
| Item7.01 | Regulation FD Disclosure. |
On March 27, 2017, the Company issued a press release announcing
its entry into the Purchase Agreement. A copy of the press
release is furnished herewith as Exhibit 99.1. In addition, the
Company intends to provide supplemental information regarding the
transaction in connection with presentations to analysts and
investors. A copy of the slides that will be made available in
connection with such presentations is furnished herewith as
Exhibit 99.2.
The information contained in Exhibits 99.1 and 99.2 shall not be
deemed filed for purposes of Section18 of the Securities Exchange
Act of 1934, as amended (the Exchange Act), or otherwise subject
to the liability of that section, and shall not be incorporated
by reference into any registration statement or other document
filed by the Company under the Securities Act of 1933, as
amended, or the Exchange Act.
| Item9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits |
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Exhibit No. |
Description of Exhibit |
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| 99.1 | Press Release dated March 27, 2017 | |
| 99.2 | Investor presentation dated March 27, 2017 |
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About SEALED AIR CORPORATION (NYSE:SEE)
Sealed Air Corporation is engaged in food safety and security, facility hygiene and product protection business. The Company’s segments are Food Care, Diversey Care, Product Care and Other (includes Corporate, Medical Applications and New Ventures businesses). The Food Care segment focuses on providing processors, retailers and food service operators a range of integrated system solutions. The Food Care business serves primarily perishable food and beverage processors, predominately in fresh red meat, smoked and processed meats, beverages, poultry and dairy markets. Diversey Care segment integrates cleaning chemicals, floor care machines, cleaning tools and equipment, and a range of services, including application and employee training, auditing of hygiene and appearance, and water and energy management. The Product Care segment provides customers with a range of Product Care solutions to meet cushioning, void fill, surface protection, retail display, containment and dunnage needs. SEALED AIR CORPORATION (NYSE:SEE) Recent Trading Information
SEALED AIR CORPORATION (NYSE:SEE) closed its last trading session down -0.79 at 44.67 with 2,110,208 shares trading hands.