| Item 1.01. | Entry into a Material Definitive Agreement. |
Share Purchase Agreement
On September 22, 2023, Enovis Corporation (the “Company”) entered into a definitive agreement to acquire LimaCorporate S.p.A. (“Lima”), a privately held global orthopedic company focused on restoring motion through digital innovation and customized hardware.
Pursuant to the terms of a Share Purchase Agreement (the “Purchase Agreement”) with Emil Holding II S.à r.l. (the “Seller”), the Company agreed to purchase all issued and outstanding share capital of Lima (the “Acquisition”) from the Seller at an enterprise value of approximately €800 million, consisting of (i) approximately €700 million in cash consideration, which includes the repayment of certain Lima indebtedness, to be paid at closing, and (ii) 1,942,686 shares of common stock of Enovis, par value $0.001 per share (the “Shares”), which the parties valued at €100 million based on the thirty-day volume weighted average price of the Company’s common stock as of the close of business on September 21, 2023, and which are expected to be issued within eighteen months following the closing of the Acquisition, in each case subject to certain adjustments and conditions as provided for in the Purchase Agreement.
The closing of the Acquisition is subject to the receipt of applicable regulatory approvals and other customary closing conditions and is expected to close in early 2024. The Seller has agreed to indemnify the Company for losses arising from certain breaches of covenants under the Purchase Agreement and for certain other potential liabilities, subject to certain limitations.
The Shares, if and when issued, will be offered and sold to the Seller in a transaction exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(a)(2) thereof. The Seller has represented that it is an “accredited investor” as defined in Regulation D under the Securities Act. Enovis has agreed pursuant to the Purchase Agreement to afford the Seller certain resale registration rights with respect to the Shares.
The foregoing summary of the Purchase Agreement is qualified in its entirety by the text of the Agreement, a copy of which is filed as Exhibit 2.1 hereto and incorporated herein by reference.
Commitment Letter
In connection with entering into the Purchase Agreement, on September 22, 2023, the Company entered into a commitment letter (the “Commitment Letter”) with JPMorgan Chase Bank, N.A. (“JPMorgan”), UBS AG Stamford Branch (“UBS AG”), and UBS Securities LLC (“UBS Securities”), pursuant to which JPMorgan and UBS AG agreed to provide a new $800 million senior bridge facility (the “Bridge Facility”) for financing the Acquisition. The Bridge Facility will be reduced by an equivalent amount of the net cash proceeds of the incurrence of a term loan facility, the issuance by the Company of debt, equity or equity-linked securities in a public offering or private placement, or the disposition of assets prior to the consummation of the Acquisition and upon other specified events, subject to certain exceptions set forth in the Commitment Letter. The funding of the Bridge Facility is subject to the satisfaction of certain customary conditions.
The Commitment Letter also provides for the agreement of JPMorgan and UBS Securities to use commercially reasonable efforts to arrange and syndicate a $400 million senior term loan facility (the “Take-Out Facility”, and together with the Bridge Facility, the “Facilities”), the proceeds of which will be used to refinance and/or reduce the commitments under all or a portion of the Bridge Facility.
JPMorgan and UBS Securities will act as joint lead arrangers and bookrunners for the Bridge Facility, JPMorgan and UBS Securities will act as joint lead arrangers and bookrunners for the Take-Out Facility, and JPMorgan will act as sole and exclusive administrative agent for the Facilities.
The foregoing summary of the Commitment Letter is qualified by the text of the Commitment Letter, a copy of which will be filed as an Exhibit to our Quarterly Report on Form 10-Q for the quarter ending September 30, 2023.
| Item 3.02. | Unregistered Sales of Equity Securities. |
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference into this Item 3.02 in its entirety.
Neither this Current Report on Form 8-K nor the exhibits attached hereto is an offer to sell or the solicitation of an offer to buy the Shares or any other securities of the Company.
