| Item 1.01 | Entry into a Material Definitive Agreement. |
Asset Purchase Agreement
On November 5, 2020, Avalara, Inc., a Washington corporation (“Avalara”), entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Business Licenses LLC, a New York limited liability company (“Business Licenses”), pursuant to which Avalara acquired substantially all the assets of Business Licenses, a leading provider of license content, software, management, and services that automate and streamline business license compliance for companies of all sizes (the “Acquisition”). The Acquisition was consummated on November 5, 2020.
The aggregate purchase price for substantially all the assets of Business Licenses is approximately $97.0 million, subject to certain working capital and other adjustments (the “Aggregate Consideration”), which will be paid in cash. Approximately $11.4 million of the purchase price will be paid to Business Licenses’ shareholders in 18 months, subject to reduction for certain indemnification obligations. Up to $20.7 million will be paid, in shares of the Company’s common stock, to Business Licenses’ shareholders following the achievement of certain Business Licenses performance metrics during the next four years. Each of Avalara and Business Licenses have made customary representations, warranties, covenants, and indemnities in connection with the Acquisition.
The foregoing descriptions of the Purchase Agreement and the Acquisition do not purport to be complete and are qualified in their entirety by reference to the Purchase Agreement, a copy of which is filed with this Current Report on Form 8-K as Exhibit 2.1 and is incorporated herein by reference.
The Purchase Agreement contains representations and warranties that the parties made to each other as of specific dates. The assertions embodied in those representations and warranties were made solely for purposes of the Purchase Agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating the terms of the Purchase Agreement. In addition, such representations and warranties: (i) may not be accurate or complete as of any specified date; (ii) are modified and qualified in important part by the underlying disclosure schedules; (iii) may be subject to a contractual standard of materiality different from those generally applicable to investors; or (iv) may have been used for the purpose of allocating risk among the parties to the Purchase Agreement, rather than establishing matters as facts. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in Avalara’s public disclosures. For the foregoing reasons, the representations and warranties should not be relied upon as statements of factual information.
| Item 2.01 | Completion of Acquisition or Disposition of Assets. |
The information regarding the Purchase Agreement and the Acquisition set forth in Item 1.01 is incorporated herein by reference.
| Item 7.01 | Regulation FD Disclosure. |
On November 5, 2020, Avalara issued a press release announcing the execution of the Purchase Agreement, a copy of which is furnished as Exhibit 99.1.
The information set forth in or incorporated by reference into this Item 7.01, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
