| Item 1.01 | Entry into a Material Definitive Agreement. |
On November 1, 2022, Sealed Air Corporation., a Delaware corporation (the “Company”), announced the execution of a Purchase Agreement, dated as of October 31, 2022 (the “Purchase Agreement”), by and among LB Super Holdco LLC, an affiliate of Olympus Partners (“Seller”), LB Holdco, Inc., the parent company of Liqui-Box, Inc. (“Liqui-Box”), Cryovac International Holdings, Inc., a wholly-owned subsidiary of the Company (“Buyer”), solely for the purposes of certain provisions therein, LB Jersey Holdco Limited, and, solely for the purposes of guaranteeing certain obligations of Buyer, the Company.
The Purchase Agreement provides that, subject to the terms and conditions set forth therein, Buyer will acquire from Seller all of the issued and outstanding shares of capital stock of Liqui-Box for an aggregate purchase price of $1.15 billion in cash, subject to customary adjustments for (i) working capital, cash, certain specific tax attributes and indebtedness of Liqui-Box at closing and (ii) specified Seller transaction expenses. The Company has secured $1.0 billion of committed financing, with the balance of the cash purchase price to be paid with cash on hand.
Prior to the closing, Liqui-Box will effect a reorganization (the “Pre-Closing Reorganization”), pursuant to which it will separate its DW Reusables, Corplex and Engineered Foam Products product lines from Liqui-Box, such that, after giving effect to the Pre-Closing Reorganization and after the closing, Liqui-Box will hold only the assets related to its liquid packaging and dispensing solutions, injection molding solution, fitments, and products and services related to the foregoing.
The closing is subject to the satisfaction of certain conditions, including (i) the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) Seller’s consummation of the Pre-Closing Reorganization and (iii) other customary conditions.
The Purchase Agreement requires Buyer to use reasonable best efforts to obtain required regulatory approvals to effect the closing, among other more specific commitments. If either party terminates the Purchase Agreement due to the inability to satisfy the regulatory approvals closing condition, then Buyer is required to pay to Seller a fee of $20 million.
The Purchase Agreement contains representations, warranties and covenants of each party customary for a transaction of this nature, including that, during the period between the date of the Purchase Agreement and the closing date, Liqui-Box is required to use reasonable efforts to operate its business in the ordinary course.
A copy of the Purchase Agreement is attached as Exhibit 2.1 to this current report on Form 8-K and is incorporated herein by reference. 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.
The representations and warranties and covenants set forth in the Purchase Agreement have been made only for the purposes of the Purchase Agreement and solely for the benefit of the parties to the Purchase Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purpose of allocating contractual risk between the parties to the Purchase 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. In addition, such representations and warranties were made only as of the dates specified in the Purchase Agreement. Accordingly, the Purchase Agreement is included in this filing only to provide investors with information regarding the terms of the Purchase Agreement and not to provide investors with any other factual information regarding the parties or their respective businesses.
Forward-Looking Statements
Certain statements contained in this Current Report on Form 8-K may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are based on our current plans and expectations and involve risks and uncertainties which are, in many instances, beyond our control, and which could cause actual results to differ materially from those included in or contemplated or implied by the forward-looking statements. Such risks and uncertainties include the following: (i) the occurrence of any event, change or other circumstance that could give rise to the termination of the Purchase Agreement; (ii) the failure to satisfy any of the conditions to the completion of the proposed transaction; (iii) the effect of the
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