West Corporation (NASDAQ:WSTC) Files An 8-K Other EventsItem 8.01. Other Events.
The following disclosure supplements and restates the first full paragraph on page 40 of the Proxy Statement in the section entitled “The Merger—Background of the Merger” by adding the underlined text:
During the evening of May9, 2017, concurrently with the delivery by Parent to West of the executed equity commitment letter and the executed debt commitment letter, the parties executed the merger agreement and the limited guarantee. Each of THL, Quadrangle and Mr.and Mrs.West executed voting agreements with Parent, and the Company entered into an indemnification agreement with each of Mr.and Mrs.West. At the signing of the merger agreement, no agreements or understandings had been entered into between the Company management team and Apollo regarding post-closing management compensation or employment arrangements. Later that evening, West and Apollo issued a joint press release announcing the execution of the merger agreement.
The following disclosure supplements and restates the last sentence of the first paragraph and the second paragraph on page 46 of the Proxy Statement in the section entitled “The Merger—Forward-Looking Financial Information” by adding the underlined text:
The financial projections (for the avoidance of doubt, not including increase (decrease) in Adjusted Net Working Capital and Unlevered Free Cash Flow (each as defined below)) were also made available in the virtual data room to Apollo, Party F, Party H and Party L, except for capital expenditures for 2020-21. The financial projections are summarized below.
None of the financial projections, increase (decrease) in Adjusted Net Working Capital nor Unlevered Free Cash Flow were intended for public disclosure. Nonetheless, a summary of the financial projections, increase (decrease) in Adjusted Net Working Capital and Unlevered Free Cash Flow is included in this proxy statement only because certain of the financial projections, increase (decrease) in Adjusted Net Working Capital and Unlevered Free Cash Flow were made available to the Board, Centerview and/or Apollo. The inclusion of the financial projections, increase (decrease) in Adjusted Net Working Capital and Unlevered Free Cash Flow in this proxy statement does not constitute an admission or representation by West, Apollo, Parent, Sub, Centerview or any other recipient of this information that the information is material.
The following disclosure supplements and restates the first paragraph on page 47 of the Proxy Statement in the section entitled “The Merger—Forward-Looking Financial Information—Financial Projections” by adding the underlined text:
The following tables summarize the financial projections, increase (decrease) in Adjusted Net Working Capital and Unlevered Free Cash Flow:
The following disclosure is added before the heading “Unlevered Free Cash Flow” on page 48 of the Proxy Statement in the section entitled “The Merger—Forward-Looking Financial Information—Financial Projections”:
Capital Expenditures and Increase (Decrease) in Adjusted Net Working Capital
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West Corporation ($ in millions) |
2017E | 2018E | 2019E | 2020E | 2021E | |||||
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Capital expenditures(1) |
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Increase (decrease) in Adjusted Net Working Capital(2) |
(8 | ) | (5 | ) | (6 | ) | (7 | ) | (8 | ) |
| (1) | Capital expenditures are presented on a cash basis. Capital expenditures for 2020-21 were not provided to bidders in the virtual data room, but were provided to Centerview for use in connection with its financial analysis and its opinion. |
| (2) | Increase (decrease) in Adjusted Net Working Capital (as defined below) was calculated by Centerview, at the direction of Company management, in connection with the calculation of Unlevered Free Cash Flow, utilizing the financial projections and reflecting certain adjustments based on the assumptions provided by Company management. Such calculation was provided to the Board, but was not made available to Apollo or any other bidder. |
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The following disclosure supplements and restates the first paragraph on page 48 of the Proxy Statement in the section entitled “The Merger Forward-Looking Financial Information—Financial Projections—Non-GAAP Financial Measures” by adding the underlined text:
Adjusted EBITDA, increase (decrease) in Adjusted Net Working Capital and Unlevered Free Cash Flow arenon-GAAPfinancial measures. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
The following disclosure is added after the third paragraph on page 48 of the Proxy Statement in the section entitled “The Merger Forward-Looking Financial Information—Financial Projections—Non-GAAP Financial Measures”:
For purposes of this section entitled “Forward-Looking Financial Information,” we define “Adjusted Net Working Capital” to mean (i)accounts receivable and prepaid expenses less (ii)accounts payable and accrued expenses.
The following disclosure supplements and restates the last two paragraphs on page 48 of the Proxy Statement in the section entitled “The Merger Forward-Looking Financial Information—Financial Projections—Non-GAAP Financial Measures” by adding the underlined text:
Unlevered Free Cash Flow and increase (decrease) in Adjusted Net Working Capital each provides another measure by which to evaluate West’s core operating performance and trends, but is not used by West for financial and operational decision making or as a means to evaluateperiod-to-periodcomparisons. Each of Unlevered Free Cash Flow and increase (decrease) in Adjusted Net Working Capital was calculated by Centerview at the direction of Company management solely for purposes of the discounted cash flow analysis in connection with Centerview’s opinion, and none of West, Parent or Centerview assumes any responsibility for any use of such estimates, or reliance on such estimates, for any other purpose.
Non-GAAPfinancial measures, including Adjusted EBITDA, increase (decrease) in Adjusted Net Working Capital and Unlevered Free Cash Flow, have limitations as analytical tools, and you should not consider anynon-GAAPfinancial measure in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include the omission of certain material costs, such as depreciation, amortization and interest, necessary to operate our business. Other companies, including companies in West’s industry, may calculate similarly titlednon-GAAPfinancial measures differently, which reduces their usefulness as a comparative measure.
The following disclosure is added after the first paragraph on page 49 of the Proxy Statement in the section entitled “The Merger—Forward-Looking Financial Information—Financial Projections—Non-GAAP Financial Measures”:
The following tables present areconciliation fromnet income toAdjusted EBITDAfor the periods indicated. The information presented in the reconciliations set forth below is being included solely to provide a quantitativereconciliation of Adjusted EBITDA to the most comparable GAAP financial measures.
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West Corporation ($ in millions) |
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Net income |
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Income tax expense |
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Interest expense and other financing charges |
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Depreciation and amortization |
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Stock-based compensation |
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Other(1) |
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Adjusted EBITDA |
| (1) | $2.0 million non-recurring acquisition costs in 2017. |
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About West Corporation (NASDAQ:WSTC)
West Corporation (West) is a global provider of technology-enabled communication services. The Company offers a range of communication and network infrastructure solutions that helps to manage or support communications. The Company operates through four segments: Unified Communications Services, which includes collaboration services, Unified Communications as a Service (UCaaS) and telecom services; Safety Services, which includes 9-1-1 network services, 9-1-1 telephony systems and services, 9-1-1 solutions for enterprises and database management; Interactive Services, which includes notifications and mobility, interactive voice response (IVR) self-service, cloud contact center and professional services, and Specialized Agent Services, which includes healthcare advocacy services, cost management services and revenue generation. The Company has sales and/or operations in the United States, Canada, Europe, the Middle East, Asia-Pacific, Latin America and South America.
