| ITEM 1.01. | Entry into a Material Definitive Agreement. |
As previously disclosed, on September 8, 2021, Perrigo Company plc (the “Company”) and Habsont Unlimited Company, a wholly owned subsidiary of the Company (the “Purchaser”), entered into a Put Option Agreement (the “Put Option Agreement”) with funds affiliated with Astorg Partners and the private equity arm of Goldman Sachs and certain other parties thereto (collectively, the “Sellers”).
Pursuant to the Put Option Agreement, following completion of the works council consultation process required under French law, the Sellers exercised their put option right under the Put Option Agreement and, on October 20, 2021, the Company, the Purchaser and the Sellers entered into a Securities Sale Agreement in the form previously agreed by the parties (the “Purchase Agreement”). Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the Purchaser has agreed to acquire certain holding companies holding all of the outstanding equity interests of Héra SAS (“HRA”) from the Sellers for cash. The transaction values HRA at approximately €1.8 billion, or approximately $2.1 billion as of the date of the Put Option Agreement, on an enterprise value basis and using a lockbox mechanism set forth in the Purchase Agreement.
The closing of the transaction is subject to customary closing conditions, including, among others, obtaining required antitrust clearances and a foreign investment authorization from the French Ministry of Economy (together, the “Regulatory Conditions”). The Purchase Agreement provides termination rights for the parties, including in the event closing of the transaction has not occurred prior to March 8, 2022 at 8:00 pm CET (subject to automatic extensions to June 8, 2022 and September 8, 2022 in certain circumstances), subject to certain exceptions. In the event the Purchase Agreement is terminated in specified circumstances relating to the failure of the Regulatory Conditions to be satisfied, then the Sellers will have the right to receive from the Purchaser a termination fee of €100 million, or approximately $119 million as of the entry into the Put Option Agreement.
The Purchase Agreement contains (a) representations and warranties and (b) covenants, including regarding the operation of HRA from the entry into the Put Option Agreement through the closing of the transaction, as well as indemnification rights, including with respect to (i) certain breaches of such representations and warranties and covenants and (ii) certain “leakage” from the lockbox mechanism as more specifically set forth in the Purchase Agreement. In addition, in connection with the entry into the Put Option Agreement, the Purchaser entered into a management warranty agreement with certain of the Sellers who are members of HRA’s management containing certain additional representations and warranties related to HRA’s business.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Purchase Agreement. A copy of the Purchase Agreement is attached hereto as Exhibit 2.1, and the terms of the Purchase Agreement are incorporated herein by reference. The Purchase Agreement contains representations, warranties and covenants that the respective parties made to each other as of the dates specified therein. The assertions embodied in those representations, warranties and covenants were made, or will be made, for purposes of the contracts among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreements. The representations, warranties and covenants in the Purchase Agreement are also modified in important part by the related schedules thereto which are not filed publicly and which may be subject to a contractual standard of materiality different from that generally applicable to stockholders and were used for the purpose of allocating risk among the parties rather than establishing matters as facts. The Company does not believe that these schedules contain information that is material to an investment decision. Investors are not third-party beneficiaries under the Purchase Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the parties thereto or any of their respective affiliates.
