VWR Corporation (NASDAQ:VWR) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry into a Material Definitive Agreement. |
Merger Agreement
On May4, 2017, VWR Corporation, a Delaware corporation (the
Company) entered into an Agreement and Plan of Merger (the Merger
Agreement) with Avantor, Inc., a Delaware corporation (Parent),
and Vail Acquisition Corp, a Delaware corporation and a wholly
owned subsidiary of Parent (Merger Sub), to which Merger Sub will
be merged with and into the Company (the Merger), with the
Company continuing as the surviving corporation. At the effective
time of the Merger (the Effective Time), each outstanding share
of common stock of the Company (Common Stock) will be converted
into the right to receive an amount per share equal to $33.25 in
cash and without interest (the Merger Consideration) (other than
any Common Stock owned by the Company, its subsidiaries, Parent
or Merger Sub immediately prior to the Effective Time or that are
held by any stockholder who is entitled to demand and has
properly demanded appraisal of such Common Stock and has not
failed to perfect, waived, withdrawn or lost the right to
appraisal under Delaware law).
Each stock option outstanding immediately prior to the Effective
Time, whether or not exercisable or vested, will be canceled and
converted into the right to receive (i)an amount in cash
determined by multiplying (A)the excess (if any) of the Merger
Consideration over the exercise price per share of Common Stock
underlying such stock option by (B)the number of shares of Common
Stock subject to such Stock Option immediately prior to the
Effective Time. Each restricted stock unit outstanding
immediately prior to the Effective Time will be converted into a
vested right to receive cash in an amount equal to the Merger
Consideration. Each share of Common Stock issued to the Companys
2014 Equity Incentive Plan that is subject to specified vesting
critera outstanding immediately prior to the Effective Time will
become fully vested and treated in accordance with the foregoing.
The board of directors of the Company (the Board) unanimously
approved, and declared that the Merger and the other transactions
contemplated by the Merger Agreement are fair and in the best
interests of the Company and its stockholders and unanimously
resolved to recommend that the companys stockholders adopt the
Merger Agreement. The Companys stockholders will be asked to vote
on the approval of the Merger Agreement at a special stockholders
meeting that will be held on a date to be announced. The closing
of the Merger is subject to the approval of the Merger Agreement
by the affirmative vote of the holders of a majority of Common
Stock outstanding (the Company Requisite Vote). Consummation of
the Merger is not subject to a financing condition.
In addition to the Company Requisite Vote, consummation of the
Merger is also subject to various customary conditions, including
the absence of legal restraints preventing or prohibiting the
Merger, the expiration of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and obtaining any required clearance, consent, approval or waiver
under any applicable foreign antitrust law, notification of
approval from the Committee on Foreign Investment in the United
States (if applicable) and the Treasurer of the Commonwealth of
Australia (or his or her delegate), the accuracy of the
representations and warranties contained in the Merger Agreement
(subject to certain materiality qualifiers) and compliance with
covenants and agreements in the Merger Agreement in all material
respects.
During the period beginning on the date of the Merger Agreement
and continuing until 11:59 P.M. (New York City time) on the
thirty-fifth day following the date of the Merger Agreement (the
Go-Shop Period), the Company is permitted to solicit, initiate or
encourage any Company Takeover Proposal (as defined in the Merger
Agreement) and participate in any discussions or negotiations, or
take any other action to facilitate the making of any proposal
that constitutes or would reasonably be expected to lead to any
Company Takeover Proposal. At the end of the Go-Shop Period, the Company
will cease such activities, and will be subject to customary
no-shop restrictions on its ability to solicit third party
proposals relating to alternative transactions or to provide
information to and engage in discussions with a third-party
(other than any Excluded Party, as described below) in relation
to an alternative transaction, subject to certain
customary
1
exceptions to
permit the Board to comply with its fiduciary duties. However,
following the expiration of the Go-Shop Period, the Company may
continue to engage in the foregoing activities with any third
party (each, an Excluded Party) that submitted a written Company
Takeover Proposal during the Go-Shop Period that the Board has
determined in good faith, after consultation with outside counsel
and financial advisor, constitutes or would reasonably be
expected to lead to a Superior Company Proposal (as defined in
the Merger Agreement) unless the Company Takeover Proposal
submitted by such Excluded Party is withdrawn or terminated or
if, on the tenth business day following the end of the Go-Shop
Period, the Board has not either made an Adverse Recommendation
Change (as defined in the Merger Agreement) or given Parent
written notice of its intent to take such action.
Prior to obtaining
the Company Requisite Vote, under specified circumstances the
Board may make an Adverse Recommendation Change as a result of
(i)an Intervening Event (as defined in the Merger Agreement) if
the Board determines in good faith after consultation with its
outside legal counsel that the failure to make a change of
recommendation would be inconsistent with its fiduciary duties or
(ii)a Superior Company Proposal that did not result from a
material breach of certain provisions of the Merger Agreement,
including the no-shop restrictions, and that
results in a definitive agreement with respect to such Superior
Company Proposal, with the Company paying any required
termination fee. Before the Board may change its recommendation
in connection with an Intervening Event or terminate the Merger
Agreement to accept a Superior Company Proposal, the Company must
provide Parent with a four business day period (reducing to two
business day period in the event of a subsequent material change
to such Superior Company Proposal) during which the Company will
negotiate in good faith with Parent to revise the terms of the
Merger Agreement in a manner that would eliminate the need for
such change in recommendation.
The Merger Agreement contains
certain termination rights for the Company and Parent, including
the right of the Company to terminate the Merger Agreement to
accept a Superior Company Proposal, subject to specified
limitations, and provides that, upon termination of the Merger
Agreement by the Company or Parent upon specified conditions, the
Company will be required to pay Parent a termination fee of
$85million if such termination occurs prior to the end of the
Go-Shop Period or if after the end of the Go-Shop Period in
connection with a Company Takeover Proposal from an Excluded
Party or, otherwise, $170million. The Merger Agreement also
provides that Parent will be required to pay the Company a
reverse termination fee of $300million upon the termination of
the Merger Agreement by the Company under specified
conditions.
Parent has obtained equity and
debt financing commitments for the purpose of financing the
transactions contemplated by the Merger Agreement and paying
related fees and expenses. Broad Street Principal Investments,
L.L.C. (the Initial Purchaser) has committed to Parent to make
equity contributions in cash of (i)an initial aggregate
liquidation preference of $2billion of a single class of series A
senior preferred stock of Vail Holdco Corp. (the Senior Preferred
Stock) and (ii)shares of a single class of series A junior
convertible preferred stock of Vail Holdco Corp. of up to
$650million in the aggregate (the Junior Convertible Preferred
Stock and, together with the Senior Preferred Stock, the
Preferred Stock). The obligations of the Initial Purchaser to
provide financing under the Preferred Stock commitment are
subject to various customary conditions.
Goldman Sachs Bank USA (GS
Bank), Goldman Sachs Lending Partners LLC (GSLP), Barclays Bank
PLC (Barclays) and Jefferies Group LLC (acting through any of its
affiliates, Jefferies and, together with GS Bank, GSLP and
Barclays, the Lenders) have agreed to provide debt financing in
an aggregate principal amount of approximately (i) $5billion in
the form of senior secured first lien term loan facilities,
consisting of a U.S. dollar denominated term loan facility (the
Dollar Term Facility) and a euro denominated term loan facility
(the Euro Term Facility and, together with the Dollar Term
Facility, the Term Facility), (ii) $500million (which amount may
be reduced by the amount of
2
commitments under the Companys
receivables securitization facility) in the form of a senior
secured first lien revolving credit facility (the Revolving
Facility and, together with the Term Facility, the Senior Secured
Facilities and each individually a Senior Facility) and (iii)
$2.25billion in the form of senior unsecured bridge facilities,
consisting of a U.S. dollar-denominated bridge loan facility (the
Dollar Bridge Facility) and, if applicable, a euro-denominated
bridge loan facility (the Euro Bridge Facility and, together with
the Dollar Bridge Facility, the Bridge Facility and, together
with the Senior Secured Facilities, the Credit Facilities and
each individually a Credit Facility), in each case, on the terms
and subject to the conditions set forth in a debt commitment
letter. The obligations of the Lenders to provide debt financing
under the Credit Facilities are subject to various customary
conditions.
The foregoing description of
the Merger Agreement is qualified in its entirety by the full
text of such agreement, which is attached hereto as Exhibit 2.1,
and is incorporated by reference herein.
The Merger Agreement has been
included to provide investors with information regarding its
terms. It is not intended to provide any other factual
information about the Company. The representations, warranties
and covenants contained in the Merger Agreement were made only
for purposes of the Merger Agreement as of the specific dates
therein, were solely for the benefit of the parties to the Merger
Agreement, 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 Merger Agreement instead of
establishing these matters as facts, and may be subject to
standards of materiality applicable to the contracting parties
that differ from those applicable to investors. Investors are not
third-party beneficiaries under the Merger Agreement and should
not rely on the representations, warranties and covenants or any
descriptions thereof as characterizations of the actual state of
facts or condition of the parties thereto or any of their
respective subsidiaries or affiliates. Moreover, information
concerning the subject matter of representations and warranties
may change after the date of the Merger Agreement, which
subsequent information may or may not be fully reflected in the
Companys public disclosures.
Voting
Agreement
On May4, 2017, Varietal
Distribution Holdings, LLC (VDH) entered into a Voting and
Support Agreement (the Voting Agreement), with Parent and Merger
Sub, to which, among other things, VDH has agreed to vote its
shares of Common Stock in favor of the Merger and the adoption of
the Merger Agreement and to grant an irrevocable proxy to Parent
with respect thereto. The foregoing summary of the Voting
Agreement does not purport to be complete and is subject to, and
qualified in its entirety by the Voting Agreement, which is
attached hereto as Exhibit 10.1 and is incorporated by
reference.
Letter
Agreement
The consummation of the
transactions contemplated by the Merger Agreement will constitute
a change of control for purposes of the Income Tax Receivable
Agreement, dated as of October7, 2014, by and between the Company
and VDH (the TRA). On May4, 2017, the Company and VDH entered
into a Letter Agreement, to which, among other things, the
Company and VDH have agreed that the Change of Control Payment
(as defined in the TRA) will be an amount equal to $56,238,010 to
be paid by the Company to VDH upon the consummation of the
transactions contemplated by the Merger Agreement. Upon payment
of the Change of Control Payment, the Company will not have any
further payment obligations under the TRA and the Company will
forfeit certain rights set forth in the TRA with respect to such
payment or otherwise. Also, upon payment of the Change of Control
Payment, the TRA will terminate, subject to the survival of
certain sections as set forth therein. The foregoing summary of
the Letter Agreement does not purport to be complete and is
subject to, and qualified in its entirety by the Letter
Agreement, which is attached hereto as Exhibit 10.2 and is
incorporated by reference.
3
8.01Other
Events.
On May5, 2017, the Company
issued a press release announcing the execution of the Merger
Agreement. A copy of the press release is attached hereto as
Exhibit 99.1 and is incorporated by reference
herein.
Also on May5, 2017, the
Company issued various communications to customers, suppliers and
employees (associates) concerning the Merger Agreement and the
proposed Merger. Copies of those communications are filed as
exhibits to this report. These communications are attached hereto
as Exhibits 99.2 through 99.4 and are incorporated by reference
herein.
| Item9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
The following exhibits are furnished as part of this
report:
| 2.1* |
Agreement and Plan of Merger, dated as of May4, 2017, by and among Avantor, Inc., Vail Acquisition Corp and VWR Corporation. |
|
| 10.1 |
Voting and Support Agreement, dated as of May4, 2017, between Avantor, Inc. and Varietal Distribution Holdings, LLC. |
|
| 10.2 |
Letter Agreement, dated as of May4, 2017, between VWR Corporation and Varietal Distribution Holdings, LLC. |
|
| 99.1 | Press Release, dated May5, 2017. | |
| 99.2 | Form of Letter to Customers, dated May5, 2017. | |
| 99.3 | Form of Letter to Suppliers, dated May5, 2017. | |
| 99.4 | Letter to Associates, dated May5, 2017. |
| * |
Schedules omitted to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request. |
Additional Information
and Where to Find It
In connection with the
proposed transaction, the Company will file with the Securities
and Exchange Commission (the SEC) and furnish to the Companys
stockholders a proxy statement. BEFORE MAKING ANY VOTING
DECISION, THE COMPANYS STOCKHOLDERS ARE URGED TO READ THE PROXY
STATEMENT IN ITS ENTIRETY WHEN IT BECOMES AVAILABLE AND ANY OTHER
DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE
PROPOSED MERGER OR INCORPORATED BY REFERENCE IN THE PROXY
STATEMENT (IF ANY) BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE
PROPOSED TRANSACTION. Investors and shareholders may obtain a
free copy of documents filed by the Company with the SEC at the
SECs
4
website at http://www.sec.gov.
In addition, investors and shareholders may obtain a free copy of
the Companys filings with the SEC from the Companys website at
http://investors.vwr.com or by directing a request to: VWR
Corporation, Radnor Corporate Center, Building One, Suite 200,
100 Matsonford Road, Radnor, Pennsylvania 19087, Attn: Investor
Relations, (610) 386-1700.
The Company and certain of its
directors, executive officers, and certain other members of
management and employees of the Company may be deemed to be
participants in the solicitation of proxies from stockholders of
the Company in favor of the proposed merger. Information about
directors and executive officers of the Company is set forth in
the proxy statement for the Companys 2017 annual meeting of
stockholders, as filed with the SEC on Schedule 14A on March31,
2017.Additional information regarding the interests of these
individuals and other persons who may be deemed to be
participants in the solicitation will be included in the proxy
statement with respect to the merger the Company will file with
the SEC and furnish to the Companys shareholders.
Forward-Looking
Statements
Statements about the expected
timing, completion and effects of the proposed Merger and related
transactions and all other statements in this report and the
exhibits furnished or filed herewith, other than historical
facts, constitute forward-looking statements within the meaning
of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Readers are cautioned not to place
undue reliance on these forward-looking statements and any such
forward-looking statements are qualified in their entirety by
reference to the following cautionary statements. All
forward-looking statements speak only as of the date hereof and
are based on current expectations and involve a number of
assumptions, risks and uncertainties that could cause the actual
results to differ materially from such forward-looking
statements. The Company may not be able to complete the proposed
Merger on the terms described above or other acceptable terms or
at all because of a number of factors, including (1)the
occurrence of any event, change or other circumstances that could
give rise to the termination of the Merger Agreement, (2)the
failure to obtain stockholder approval or the failure to satisfy
the closing conditions, (3)the failure to obtain the necessary
financing arrangements set forth in the debt and equity
commitment letters delivered to the Merger Agreement, (4)risks
related to disruption of managements attention from the Companys
ongoing business operations due to the proposed Merger and (5)the
effect of the announcement of the Merger on the ability of the
Company to retain and hire key personnel and maintain
relationships with its customers, suppliers, operating results
and business generally.
Actual results may differ
materially from those indicated by such forward-looking
statements. In addition, the forward-looking statements represent
the Companys views as of the date on which such statements were
made. The Company anticipates that subsequent events and
developments may cause its views to change. However, although the
Company may elect to update these forward-looking statements at
some point in the future, it specifically disclaims any
obligation to do so. These forward-looking statements should not
be relied upon as representing the Companys views as of any date
subsequent to the date hereof. Additional factors that may affect
the business or financial results of the Company are described in
the risk factors included in the Companys filings with the SEC,
including the Companys 2016 Annual Report on Form 10-K, as amended, the Companys
quarterly reports on Form 10-Q and Current Reports on Form 8-K.
The Company expressly disclaims a duty to provide updates to
forward-looking statements, whether as a result of new
information, future events or other
occurrences.
5
to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned
hereunto duly authorized.
| VWR CORPORATION | ||||||
| Date: May5, 2017 | ||||||
| By: |
/s/ George Van Kula |
|||||
| Name: | George Van Kula | |||||
| Title: |
Senior Vice President, Human Resources, General Counsel and Secretary |
6
EXHIBIT
INDEX
|
Exhibit Number |
Description |
|
| 2.1* |
Agreement and Plan of Merger, dated as of May4, 2017, by and among Avantor, Inc., Vail Acquisition Corp and VWR Corporation. |
|
| 10.1 |
Voting and Support Agreement, dated as of May4, 2017, between Avantor, Inc. and Varietal Distribution Holdings, LLC. |
|
| 10.2 |
Letter Agreement, dated as of May4, 2017, between VWR Corporation and Varietal Distribution Holdings, LLC. |
|
| 99.1 | Press Release, dated May5, 2017. | |
| 99.2 | Form of Letter to Customers, dated May5, 2017. | |
| 99.3 | Form of Letter to Suppliers, dated May5, 2017. | |
| 99.4 | Letter to Associates, dated May5, 2017. |
| * | Schedules omitted |
About VWR Corporation (NASDAQ:VWR)
VWR Corporation is a provider of laboratory products, services and solutions to the life science, general research and applied markets. The Company operates in two segments: Americas and EMEA-APAC. Its Americas segment consists of operations located principally in the United States and Canada, as well as in Puerto Rico, Mexico and select countries in Central and South America, including Costa Rica, Brazil, Argentina and Chile, and includes over 65 facilities located in approximately 10 countries. The EMEA-APAC segment consists of its operations located principally in Europe, as well as in certain Asia-Pacific countries, and includes approximately 100 facilities located in over 30 countries. Both of its segments provide laboratory products, services and solutions to customers in the life science, general research and applied markets, including the biopharma, agricultural, chemical, environmental, food and beverage, healthcare, microelectronic and petrochemical industries. VWR Corporation (NASDAQ:VWR) Recent Trading Information
VWR Corporation (NASDAQ:VWR) closed its last trading session down -0.77 at 33.28 with 4,636,285 shares trading hands.
