SYNCHRONOSS TECHNOLOGIES,INC. (NASDAQ:SNCR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On December5, 2016, Synchronoss Technologies,Inc., a Delaware
corporation (Parent), GL Merger Sub,Inc., a Delaware corporation
and a wholly owned subsidiary of Parent (Merger Sub), and
Intralinks Holdings,Inc., a Delaware corporation (Intralinks)
entered into an Agreement and Plan of Merger (the Merger
Agreement). The Merger Agreement provides that, upon the terms
and subject to the conditions of the Merger Agreement, Merger Sub
will commence a cash tender offer (the Offer) to purchase all of
the outstanding shares (the Shares) of Intralinks common stock,
$0.001 par value, at a price of $13.00 per share (the Offer
Price), without interest and subject to any required withholding
taxes. The Offer is expected to be completed in the first quarter
of 2017.
Consummation of the Offer is subject to various conditions set
forth in the Merger Agreement, including, but not limited to
(i)at least a majority of shares of Intralinks common stock then
outstanding being validly tendered into, and not withdrawn from,
the Offer, (ii)the receipt of required approvals, waivers and
consents, and (iii)other conditions set forth in ExhibitA to the
Merger Agreement.
The Offer will expire at one minute after 11:59 P.M., New York
City time, at the end of the 20th business day (calculated in
accordance with the rulesof 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 rulesand regulations of the United States
Securities and Exchange Commission (the SEC).
Following consummation of the Offer, Merger Sub will merge with
and into Intralinks with Intralinks surviving as a wholly-owned
subsidiary of Parent (the Merger). to the terms of the Merger,
each outstanding Share that is not validly tendered and accepted
to the Offer (other than the Shares held in the treasury of
Intralinks, Shares held directly or indirectly by Parent or its
subsidiaries, and Shares as to which appraisal rights have been
perfected in accordance with applicable law) will be cancelled
and converted into the right to receive the Offer Price, on the
terms and conditions set forth in the Merger Agreement.
The Merger Agreement provides that the Merger will be governed by
Section251(h)of the Delaware General Corporation Law (the DGCL)
and shall be effected by Merger Sub and Intralinks as soon as
practicable following the consummation of the Offer without a
stockholders meeting to the DGCL.
Parent intends to fund the acquisition with cash on hand,
including proceeds from the Divestiture described below in Item
2.01 of this Current Report on Form8-K, and up to $900 million
under a new term loan facility. On December5, 2016, Parent
entered into a commitment letter (the Commitment Letter) with
Goldman Sachs Bank USA, Credit Suisse AG and Credit Suisse
Securities (USA) LLC (the Lenders), to which, subject to the
terms and conditions set forth therein, the Lenders have
committed to provide a $900 million term loan, the proceeds of
which may be used for the payment of the Offer Price contemplated
by, and the payment of fees and expenses incurred in connection
with, the Merger Agreement and the Offer. The commitment to
provide the financing is subject to certain conditions, including
the negotiation of definitive documentation and other customary
closing conditions consistent with the Merger Agreement and
Commitment Letter. The definitive agreement for the term loan
facility will contain, among other terms, affirmative covenants,
negative covenants, financial covenants and events of default, in
each case to be negotiated by the parties consistent with the
Commitment Letter. Parent will pay customary fees and expenses in
connection with obtaining the term loan facility. The foregoing
description of the Commitment Letter does not purport to be
complete and is qualified in its entirety by reference to the
Commitment Letter, which is filed as Exhibit10.1 hereto and is
incorporated herein by this reference.
The Merger Agreement contains customary representations and
warranties by Parent, Merger Sub and Intralinks. The Merger
Agreement also contains customary covenants and agreements,
including with respect to the operations of the business of
Intralinks and its subsidiaries between signing and closing,
restrictions on responses by Intralinks with respect to
alternative transactions, governmental filings and approvals and
other matters.
The Merger Agreement generally prohibits Intralinks solicitation
of proposals relating to alternative business combination
transactions and restricts Intralinks ability to furnish
non-public information to, or participate in any discussions or
negotiations with, any third party with respect to any such
transaction, subject to certain limited exceptions.
The Merger Agreement contains termination rights for each of
Parent, Merger Sub and Intralinks. The Merger Agreement
further provides that upon termination of the Merger Agreement
under specified circumstances (i)Intralinks may be required to
pay Parent a termination fee of $24.6 million and (ii)Parent
may be required to pay Intralinks a termination fee of $49.2
million.
A copy of the Merger Agreement is attached hereto as Exhibit2.1
and is incorporated herein by reference. The foregoing
description of the Merger Agreement is qualified in its
entirety by reference to the full text of the Merger Agreement.
The Merger Agreement has been attached to provide investors
with information regarding its terms. It is not intended to
provide any other factual information about Parent, Merger Sub
or Intralinks. In particular, the assertions embodied in the
representations and warranties contained in the Merger
Agreement are qualified by information in confidential
disclosure schedules provided by the parties thereto in
connection with the signing of the Merger Agreement. These
disclosure schedules include information that modifies,
qualifies and creates exceptions to the representations,
warranties and covenants set forth in the Merger Agreement.
Moreover, certain representations and warranties in the Merger
Agreement were used for the purpose of allocating risk between
Parent, Merger Sub and Intralinks, rather than establishing
matters of fact. Accordingly, the representations and
warranties in the Merger Agreement may not constitute the
actual state of facts about Parent, Merger Sub or Intralinks.
Tender and Support Agreements
Concurrently with the execution of the Merger
Agreement,Intralinks Chief Executive Officer and certain
greater than 10% holders of the Companys common stock entered
into Tender and Support Agreements with Parent and Merger Sub
(the Tender and Support Agreements), which provide, among other
things, that such persons will tender their Shares in the
Offer. The Tender and Support Agreements will terminate upon
termination of the Merger Agreement and certain other specified
events.
The foregoing description of the Tender and Support Agreements
does not purport to be complete and is subject to, and
qualified in its entirety by, the full text of the form of
Tender and Support Agreement, which is attached as Exhibit99.1
hereto and incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of
Assets.
On December5, 2016, Parent entered into a purchase and sale and
amended and restated operating agreement (the Operating
Agreement) by and among Sequential Technology International,
LLC (STI), Parent and Sequential Technology International
Holdings, LLC (Sequential) to which Parent sold a 70% interest
(the Divestiture) in STI to Sequential in return for a cash
payment of $146 million to Parent. Parent previously formed STI
and contributed certain of its activation business assets to
STI in return for its initial membership interest in STI. As
part of the transactions contemplated by the Divestiture,
Parent issued a promissory note to Sequential, which is secured
by Sequentials interest in STI. In addition, Parent is
retaining a 30% interest in STI. to the terms of the Operating
Agreement, Parent has certain put rights whereby Sequential
would be required to purchase Parents interest in STI in
certain circumstances and Sequential has a corresponding call
right where Sequential would be required to purchase Parents
interest in STI in certain circumstances.
Item 7.01 Regulation FD Disclosure.
On December6, 2016, Parent and Intralinks issued a joint press
release announcing entry into the Merger Agreement. The
companies also announced that following the closing of the
transaction, Ron Hovsepian, Chief Executive Officer of
Intralinks, is expected to be appointed Chief Executive Officer
of Parent and join Parents Board of Directors, with Parents
Founder and current Chief Executive Office Stephen G. Waldis
transitioning into being an active Executive Chairman of the
Board. The full text of the press release is attached hereto as
Exhibit99.2 and incorporated herein by reference.
In addition, on December6, 2016, Parent and Intralinks will
also hold a conference call for analysts and investors that
will include a presentation containing supplemental information
regarding the proposed transaction. A copy of the presentation
is attached hereto as Exhibit99.3.
The information under Item 7.01 in this Form8-K and in Exhibits
99.2 and 99.3 shall be deemed furnished and not filed for the
purpose of Section18 of the Exchange Act, or otherwise subject
to the liabilities of that section, and shall not be
incorporated by reference into any registration statement or
other document. The information under Item 7.01 in this Form8-K
shall not be incorporated by reference into any registration
statement or other document filed under the Securities Act of
1933, as amended, or the Exchange Act, except as shall be
expressly set forth by specific reference in such filing.
Additional Information and Where to Find It
In connection with the proposed acquisition of Intralinks,
Synchronoss will commence a tender offer for the outstanding
shares of Intralinks. The tender offer has not yet commenced.
This document is for informational purposes only and is neither
an offer to purchase nor a solicitation of an offer to sell
shares of Intralinks, nor is it a substitute for the tender
offer materials that Synchronoss and Merger Sub will file with
the SEC upon commencement of the tender offer. At the time the
tender is commenced, Synchronoss and Merger Sub will file
tender offer materials on Schedule TO, and Intralinks will file
a Solicitation/Recommendation Statement on Schedule 14D-9 with
the SEC with respect to the tender offer. The tender offer
materials (including an Offer to Purchase, a related Letter of
Transmittal and certain other tender offer documents) and the
Solicitation/Recommendation Statement will contain important
information. Holders of shares of Intralinks are urged to read
these documents when they become available because they will
contain important information that holders of Intralinks
securities should consider before making any decision regarding
tendering their securities. The Offer to Purchase, the related
Letter of Transmittal and certain other tender offer documents,
as well as the Solicitation/Recommendation Statement, will be
made available to all holders of shares of Intralinks at no
expense to them. The tender offer materials and the
Solicitation/Recommendation Statement will be made available
for free at the SECs web site at www.sec.gov.
Forward-Looking Statements
Certain statements either contained in or incorporated by
reference into this report, other than purely historical
information, including estimates, projections and statements
relating to Intralinks and Synchronoss business plans,
objectives and expected operating results, and the assumptions
upon which those statements are based, are forward-looking
statements that involve risks and uncertainties. These
forward-looking statements include statements regarding
acquisition synergies and benefits to Synchronoss, the growth
of the market and demand for Synchronoss offerings, growth
opportunities, the closing of the debt financing and
acquisition and impact of such transactions, momentum in
Synchronoss business and momentum with the offerings discussed
in this press release, potential growth of Synchronoss
business, product performance, the ability to successfully
integrate the companies and their respective products, and the
timing of the transaction. Although Synchronoss attempts to be
accurate in making forward-looking statements, it is possible
that future circumstances might differ from the assumptions on
which such statements are based. Important factors that could
cause results to differ materially from the statements herein
include the following: general economic risks; execution risks
with acquisitions; closing conditions; risks associated with
sales not materializing based on a change in circumstances;
disruption to sales following acquisitions; increasing
competitiveness in the enterprise and mobile solutions market;
ability to retain key personnel following the acquisition; the
dynamic nature of the markets in which the companies operate;
specific economic risks in different geographies, and among
different customer segments; changes in foreign currency
exchange rates; uncertainty regarding increased business and
renewals from existing customers; uncertainties around
continued success in sales growth and market share gains;
failure to convert sales pipeline into final sales; risks
associated with successful implementation of multiple
integrated software products and other product functionality
risks; execution risks around new product development and
introductions and innovation; product defects; unexpected
costs, assumption of unknown liabilities and increased costs
for any reason; litigation and disputes and the potential cost,
distraction and damage to sales and reputation caused thereby;
market acceptance of new products and services; the ability to
attract and retain personnel; changes in strategy; risks
associated with management of growth; lengthy sales and
implementation cycles, particularly in larger organizations;
technological changes that make our products and services less
competitive; risks associated with the adoption of, and demand
for, our model in general and by specific customer segments;
competition and pricing pressure; and the other risk factors
set forth from time to time in Synchronoss most recent Annual
Report on Form10-K, our most recent Quarterly Report on
Form10-Q and our other filings with the SEC, copies of which
are available free of charge at the SECs website at www.sec.gov
or upon request from Synchronoss investor relations department.
All forward-looking statements herein reflect Synchronoss
opinions only as of the date of this release, and Synchronoss
undertakes no obligation, and expressly disclaim any
obligation, to update forward-looking statements herein in
light of new information or future events.
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Item 9.01 |
Financial Statements and Exhibits. |
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(a) |
Financial Statements of Businesses Acquired. |
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None. |
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(b) |
Pro Forma Financial Information. |
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To the extent that pro forma financial information |
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to this Current Report on Form8-K within seventy-one (71) |
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(c) |
Shell Company Transactions. |
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None. |
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(d) |
Exhibits |
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Exhibit Number |
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Description |
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2.1* |
Agreement and Plan of Merger by and among Synchronoss |
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10.1 |
Commitment Letter, dated as of December5, 2016, by and |
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99.1 |
Formof Tender and Support Agreement by and between |
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99.2 |
Joint Press Release issued by Synchronoss |
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99.3 |
Investor Presentation Materials, dated December6, 2016. |
* Certain schedules have been omitted and Parent agrees to
furnish supplementally to the Securities and Exchange
Commission a copy of any omitted exhibits and schedules upon
request.
About SYNCHRONOSS TECHNOLOGIES, INC. (NASDAQ:SNCR)
Synchronoss Technologies, Inc. (Synchronoss) offers cloud solutions and software-based activation for mobile carriers, enterprises, retailers and original equipment manufacturers (OEMs). The Company operates in providing cloud solutions and software-based activation for connected devices segment. Its software provides consumer and enterprise solutions for transactions on a range of connected devices across the world’s networks. The Company’s solutions include activation and provisioning software for devices and services, cloud-based sync, backup, storage and content engagement capabilities, broadband connectivity solutions, analytics, identity/access management and secure mobility management that enable communications service providers (CSPs), cable operators/multi-services operators (MSOs) and OEMs with embedded connectivity, multi-channel retailers, medium and large enterprises and their consumers, as well as other customers for secure and broadband networks, and connected devices. SYNCHRONOSS TECHNOLOGIES, INC. (NASDAQ:SNCR) Recent Trading Information
SYNCHRONOSS TECHNOLOGIES, INC. (NASDAQ:SNCR) closed its last trading session down -6.87 at 42.13 with 459,059 shares trading hands.
