WILLDAN GROUP,INC. (NASDAQ:WLDN) Files An 8-K Completion of Acquisition or Disposition of AssetsItem 2.01. Completion of Acquisition or Disposition of Assets.
On July28, 2017, Willdan Group,Inc. (the “Company”) and its wholly-owned subsidiary, Willdan Energy Solutions (“WES”), acquired (the “IA Acquisition”) all of the outstanding shares of Integral Analytics,Inc. (“Integral Analytics”), a data analytics and software company, to the Stock Purchase Agreement, dated July28, 2017 (the “Purchase Agreement”), by and among the Company, WES,Integral Analytics, the stockholders of Integral Analytics (the “IA Stockholders”) and the Sellers’ Representative (as defined therein).
to the terms of the Purchase Agreement, WES will pay the IA Stockholders a maximum purchase price of $30.0 million, consisting of (i)$15.0 million in cash paid at closing (subject to certain post-closing tangible net asset value adjustments), (ii)90,611 shares of common stock, par value $0.01 per share, of the Company (the “Common Stock”) issued at closing, equaling $3.0 million, calculated based on the volume-weighted average price of shares of Common Stock for the ten trading days immediately prior to, but not including, the closing date of the IA Acquisition (the “Closing Date”) and (iii) up to $12.0 million in cash for a percentage of sales attributable to the business of Integral Analytics during the three years after the Closing Date, as more fully described below (such potential payments of up to $12.0 million, being referred to as “Earn-Out Payments” and $12.0 million in respect thereof, being referred to as the “Maximum Payout”).
The size of the Earn-Out Payments to be paid will be determined based on two factors. First, the IA Stockholders will receive 2% of gross contracted revenue for new work sold by the Company in close collaboration with Integral Analytics during the three years following the Closing Date (the “Earn-Out Period”). Second, the IA Stockholders will receive 20% of the gross contracted revenue specified in each executed and/or effective software licensing agreement, entered into by the Company or one of its affiliates that contains pricing either equal to or greater than standard pricing, of software offered for licensing by Integral Analytics during the Earn-Out Period. The amounts due to the IA Stockholders to these two factors will in no event, individually or in the aggregate, exceed the Maximum Payout. Earn-Out Payments will be made in quarterly installments for each year of the Earn-Out Period. For the purposes of both of these factors credit will be given to Integral Analytics for the gross contracted revenue in the quarter in which the contract/license is executed, regardless of when the receipt of payment thereunder is expected. The amount of gross contracted revenue for contracts with unfunded ceilings or of an indeterminate contractual value will be mutually agreed upon. Further, in the event of a change of control of WES during the Earn-Out Period, any then-unpaid amount of the Maximum Payout will be paid promptly to the IA Stockholders, even if such Earn-Out Payments have not been earned at that time. The Company has agreed to certain covenants regarding the operation of Integral Analytics during the Earn-Out Period, of which a violation by the Company could result in damages being paid to the IA Stockholders in respect of the Earn-Out. In addition, the Earn-Out Payments will be subject to certain subordination provisions in favor of BMO Harris Bank, N.A. (“BMO”), the Company’s senior secured lender.
to the Purchase Agreement, WES will also establish a bonus pool for the employees of Integral Analytics to be paid based on Integral Analytics’ performance against certain targets.
The Purchase Agreement also contains customary representations and warranties regarding WES,Integral Analytics and the IA Stockholders, indemnification provisions and other provisions customary for transactions of this nature.
The Company used cash on hand for the $15.0 million cash payment paid at closing.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement, which is filed as Exhibit2.1 hereto and is incorporated herein by reference. Certain schedules and exhibits to the Purchase Agreement have been omitted to Item 601(b)(2)of Regulation S-K. The Company agrees to furnish supplementally a copy of any omitted schedule or exhibits upon request to the Securities and Exchange Commission.
