THE KEYW HOLDING CORPORATION (NASDAQ:KEYW) Files An 8-K Entry into a Material Definitive Agreement

THE KEYW HOLDING CORPORATION (NASDAQ:KEYW) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01

Entry Into a Material Definitive Agreement.
On March 8, 2017, The KeyW Corporation (KeyW), a Maryland
corporation and a wholly-owned subsidiary of The KeyW Holding
Corporation (the Company), announced that it entered into an
Agreement and Plan of Merger (the Merger Agreement), dated as of
March 8, 2017, by and among KeyW, Sandpiper Acquisition
Corporation, a Delaware corporation and a wholly-owned subsidiary
of KeyW (Merger Sub), Sotera Holdings Inc., a Delaware
corporation (Sotera), and Sotera Equity Partners GP LLC, a
Delaware limited liability company, as the Stockholders
Representative, to which, among other things, Merger Sub will be
merged with and into Sotera (the Merger), with Sotera surviving
the Merger as a wholly-owned subsidiary of KeyW. Sotera is an
agile, mid-sized national security technology company that
delivers innovative systems, solutions and services in support of
the critical missions and programs of Civilian Agencies,
Department of Defense, Intelligence Community, Department of
Homeland Security, federal law enforcement agencies and other
parts of the federal government charged with ensuring the safety
and security of our nation. The Merger is expected to close in
the second quarter of 2017.
Merger Agreement
Under the terms of the Merger Agreement, the aggregate purchase
price to be paid for Sotera at closing is $235.0 million in cash,
subject to certain adjustments (the Merger Consideration). KeyW
intends to fund the Merger Consideration in part through a senior
secured debt financing (the Financing).
The Merger Consideration is subject to adjustment (increased or
decreased) on a dollar-for-dollar basis to the extent the working
capital of Sotera as of the closing differs from a specified
target. The Merger Agreement requires the deposit of $4.0 million
of the Merger Consideration into escrow to secure payment of any
post-closing working capital adjustments in favor of KeyW. In
addition, the Merger Agreement includes customary indemnification
obligations and requires the deposit of (i) $1.8 million of the
Merger Consideration into escrow to secure the indemnification
obligations of the securityholders of Sotera for breaches of
representations and warranties, and (ii) $0.6 million of the
Merger Consideration into escrow to secure the indemnification
obligations of the securityholders of Sotera for any breach of
covenants or certain indemnifiable matters set forth in the
Merger Agreement. KeyW is also purchasing a buy-side
representation and warranty insurance policy for the benefit of
KeyW.
The Merger Agreement includes customary interim operating
covenants. The consummation of the Merger is subject to the
satisfaction of customary conditions, including expiration or
termination of all applicable waiting periods under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and any
other regulatory approvals.
The Merger Agreement contains customary termination rights,
including the right of Sotera to terminate the Merger Agreement
if all of the conditions to closing have been satisfied, Sotera
has delivered written notice to KeyW that Sotera is ready,
willing and able to effect the closing, and KeyW fails to
consummate the closing within 2 business days following such
written notice, in which case a termination fee of $11.8 million
will be payable by KeyW to Sotera. The termination fee is also
payable if KeyW terminates as a result of the closing not
occurring on or before June 5, 2017 (the Termination Date), and
at the time of such Company termination, Sotera had a right to
terminate the Merger Agreement to the foregoing sentence. The
Merger Agreement also provides that either Sotera or KeyW may
terminate the Merger Agreement if the closing has not occurred on
or before the Termination Date; provided>that if the marketing
period for the Financing has commenced but not concluded before
the Termination Date, the Termination Date will be extended to
the end of the marketing period, plus 5 business days.
Item 2.02
Results of Operations and Financial Condition.
On March 8, 2017, the Company issued a press release announcing
its financial results for the three and twelve months ended
December 31, 2016. A copy of the Companys press release is
attached hereto as Exhibit 99.1.
As provided in General Instruction B.2 of Form 8-K, the
information contained in this Item 2.02 and Exhibit 99.1 shall
not be deemed to be filed for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended, nor shall it be
deemed to be incorporated by reference in any filing under the
Securities Act of 1933, as amended, except as shall be expressly
set forth by specific reference in such a filing.
Item 7.01
Regulation FD Disclosure.
On March 8, 2017, the Company issued a press release announcing
the entering into of the Merger Agreement. A copy of the Companys
press release is attached hereto as Exhibit 99.2.
The Company will hold a conference call and webcast on March 8,
2017 to discuss its financial results for the three and twelve
months ended December 31, 2016 and the Sotera transaction. A copy
of the slide presentation regarding the Sotera transaction
included in the webcast is attached hereto as Exhibit 99.3.
As provided in General Instruction B.2 of Form 8-K, the
information contained in this Item 7.01, Exhibit 99.2 and Exhibit
99.3 shall not be deemed to be filed for purposes of Section 18
of the Securities Exchange Act of 1934, as amended, nor shall it
be deemed to be incorporated by reference in any filing under the
Securities Act of 1933, as amended, except as shall be expressly
set forth by specific reference in such a filing.
Item 9.01
Financial Statements and Exhibits
Exhibit Number
Description
99.1
Press Release of the Company dated March 8, 2017.
99.2
Press Release of the Company, dated March 8, 2017.
99.3
Investor Presentation, dated March 8, 2017.


About THE KEYW HOLDING CORPORATION (NASDAQ:KEYW)

The KEYW Holding Corporation (KEYW) is a provider of cybersecurity, cyber superiority and geospatial intelligence solutions to the United States Government defense, intelligence and national security agencies, and commercial enterprises. The Company operates through two segments: Government Solutions and Commercial Cyber Solutions. KEYW’s capabilities include solutions, services and products to support the collection, processing, analysis, use of intelligence data and information in the domains of cyberspace and geospace, and the protection of networks and related infrastructure. It provides a range of engineering services, cybersecurity and analytic products, and integrated platforms that support the intelligence process, including collection, processing, analysis and impact. KEYW’s platforms include various modified commercial turboprop aircraft for imagery and light detection and ranging (LIDAR), collection, products that the Company manufactures, as well as hardware and software.

THE KEYW HOLDING CORPORATION (NASDAQ:KEYW) Recent Trading Information

THE KEYW HOLDING CORPORATION (NASDAQ:KEYW) closed its last trading session down -0.52 at 9.13 with 604,902 shares trading hands.

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