INTRODUCTION
This Transaction Statement on Schedule 13E-3 (this “Transaction Statement”) is being filed with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to Section 13(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), jointly by the following persons (each, a “Filing Person,” and collectively, the “Filing Persons”): (1) Zuora, Inc., a Delaware corporation (“Zuora” or the “Company”) and the issuer of the (a) Class A Common Stock, par value $0.0001 per share (the “Zuora Class A Common Stock”) and (b) Class B Common Stock, par value $0.0001 per share (the “Zuora Class B Common Stock” and together with the Zuora Class A Common Stock, the “Zuora Common Stock”) that is the subject of the Rule 13e-3 transaction; (2) Zodiac Purchaser, L.L.C., a Delaware limited liability company (“Parent”); (3) Zodiac Acquisition Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (“Merger Sub”, and together with Parent, the “Parent Entities”); (4) Zodiac Guarantor, L.L.C. (“Guarantor”); (5) Zodiac Holdco, L.L.C. (“Holdco”); (6) Silver Lake Alpine Associates II, L.P., a Delaware limited partnership (“SLAA”); (7) SLA Zurich Holdings, L.P., a Delaware limited partnership (“SLA Zurich Holdings”); (8) SLA Zurich GP, L.L.C., a Delaware limited liability company (“SLA Zurich GP”); (9) SLA Zurich Aggregator, L.P., a Delaware limited partnership (“SLA Zurich Aggregator”); (10) SL Alpine II Aggregator GP, L.L.C., a Delaware limited liability company (“SLA Aggregator GP”); (11) Silver Lake Alpine II, L.P., a Delaware limited partnership (“SLA II”); (12) SLAA II (GP), L.L.C., a Delaware limited liability company (“SLAA GP”); (13) Silver Lake Group, L.L.C., a Delaware limited liability company (“SLG”, and together with Guarantor, Holdco, SLAA, SLA Zurich Holdings, SLA Zurich GP, SLA Zurich Aggregator, SLA Aggregator GP, SLA II and SLAA GP, the “Silver Lake Filing Parties”); and (14) Tien Tzuo (the “Tzuo Filing Party”).
This Transaction Statement relates to the Agreement and Plan of Merger, dated October 17, 2024 (including all exhibits and documents attached thereto, and as it may be amended, supplemented or modified, from time to time, the “Merger Agreement”), by and among Zuora, Parent and Merger Sub. The Merger Agreement provides that, subject to the terms and conditions set forth in the Merger Agreement, Merger Sub will merge with and into Zuora (the “Merger”), with Zuora surviving the Merger and becoming a wholly owned subsidiary of Parent.
At the effective time of the Merger (the “Effective Time”), (1) each share of Zuora Common Stock outstanding immediately prior to the Effective Time (other than shares held by (a) the Company, the Parent Entities and any of their respective subsidiaries and the shares of Zuora Common Stock rolled over by Tien Tzuo, The Next Left Trust and the 70 Thirty Trust (together, the “CEO Rollover Stockholders”) pursuant to the Support and Rollover Agreement (as defined below) (the “Owned Company Shares”) and (b) stockholders who have neither voted in favor of the adoption of the Merger Agreement nor consented thereto in writing, who are entitled to appraisal and who have properly exercised appraisal rights for such shares in accordance with Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”)) and who do not validly withdraw or otherwise lose their appraisal rights will be cancelled and extinguished and automatically converted into the right to receive cash in an amount equal to $10.00 per share, without interest thereon and subject to any applicable withholding taxes and (2) each Owned Company Share will be cancelled and extinguished without any conversion thereof or consideration paid therefor. Following the Merger, Zuora Class A Common Stock will be delisted from the New York Stock Exchange (“NYSE”), Zuora will be deregistered under the Exchange Act and the Company’s stockholders (other than the Silver Lake Filing Parties and the CEO Rollover Stockholders, indirectly) will cease to have any ownership interest in the Company.
In connection with entering into the Merger Agreement, on October 17, 2024, the CEO Rollover Stockholders entered into a voting, support and rollover agreement (the “Support and Rollover Agreement”) with Parent, Holdco, Zuora and, solely for purposes specified therein, SLA II. Pursuant to the Support and Rollover Agreement, the CEO Rollover Stockholders agreed, among other things, to vote all of their shares of Zuora Common Stock in favor of the adoption of the Merger Agreement, subject to the terms and conditions contained in the Support and Rollover Agreement. In addition, pursuant to the Support and Rollover Agreement, the CEO Rollover Stockholders will elect and thereafter contribute shares of Zuora Common Stock with an aggregate value of $70,000,000 (the “Aggregate Rolled Value”) to a direct or indirect parent company of Parent in exchange for equity interests in such direct or indirect parent company of Parent. As a result of the Merger, the shares of Zuora Common Stock contributed to such direct or indirect parent company of Parent by the CEO Rollover Stockholders will be cancelled and extinguished without any conversion thereof or consideration paid therefor along with the other Owned Company Shares.
Zuora’s Board of Directors (the “Zuora Board”) formed a Special Committee of the Zuora Board comprised solely of independent and disinterested directors (the “Special Committee”) to explore, consider, review, evaluate and, if appropriate, negotiate the terms of, one or more transactions for strategic alternatives to the current stand-alone plan for Zuora, including a potential sale of Zuora (the foregoing, collectively, the “Strategic Alternatives Process”). The Special Committee, as more fully described in the Proxy Statement, with the assistance of its own independent financial and legal advisors, considered, evaluated and negotiated the Merger Agreement. At the conclusion of its review, the Special Committee, among other things, unanimously (1) determined that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable, fair to and in the best interests of Zuora and the Unaffiliated Company Stockholders (as defined below), (2) recommended that the Zuora Board determine that the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement are advisable, fair to and in the best interests of Zuora and its stockholders and adopt and approve the Merger Agreement, the Merger and the other transactions contemplated by the Merger Agreement and (3) recommended that, subject to approval by the Zuora Board, the Zuora Board submit the Merger Agreement to Zuora’s stockholders entitled to vote thereon for adoption thereby and resolve to recommend that such stockholders adopt the Merger Agreement and approve the transactions contemplated by the Merger Agreement, including the Merger. “Unaffiliated Company Stockholders” means the holders of Zuora common stock, excluding (1) any holder who enters into a rollover agreement, including Mr. Tien Tzuo and certain of his affiliates that hold shares of Zuora common stock, (2) the Silver Lake Filing Parties or its affiliates (including Parent and Merger Sub), (3) any person that Zuora has determined to be an “officer” of Zuora within the meaning of Rule 16a-1(f) of the Securities Exchange Act of 1934, as amended and (4) those members of the Zuora Board who are (A) not members of the Special Committee or (B) members designated by an affiliate of the Silver Lake Filing Parties.
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