| | | On August 6, 2023, the Issuer entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Verde Purchaser, LLC, an entity affiliated with Clayton, Dubilier & Rice, LLC (“Parent”), and Verde Merger Sub, Inc. (“Merger Subsidiary”). Pursuant to the Merger Agreement and upon the terms and conditions set forth therein, at the effective time of the Merger (as defined below), Merger Subsidiary will be merged with and into the Issuer with the Issuer surviving the merger as a wholly owned subsidiary of Parent (the “Merger”). Concurrently with the execution of the Merger Agreement, certain entities affiliated with The Baupost Group, L.L.C. (the “Baupost Stockholders”) entered into a Voting Agreement with the Issuer and Parent, dated as of August 6, 2023 (the “Voting Agreement”).
During the term of the Voting Agreement, at every meeting of the stockholders of the Issuer (the “Company Stockholders”), including any postponement, recess or adjournment thereof (“Company Stockholder Meeting”), or in any other circumstances in which the Company Stockholders act (including by written consent), the Baupost Stockholders agree to affirmatively vote (or execute consents with respect to) all of their shares of the Issuer’s common stock (“Company Stock”) owned of record or beneficially as of the date of the Voting Agreement and any additional shares of Company Stock acquired during the term of the Voting Agreement (the “Voting Agreement Shares”) as follows: (i) in favor of (1) the adoption of the Merger Agreement and the approval of the Merger; (2) the adoption of any amended and restated Merger Agreement or amendment to the Merger Agreement that, in any such case, does not decrease the merger consideration, extend the End Date (as defined in the Merger Agreement) or result in the Merger Agreement being less favorable to the Company Stockholders than the Merger Agreement in effect as of the date of the Voting Agreement; (3) the approval of any proposal to adjourn or postpone any Company Stockholder Meeting if the Issuer or Parent proposes or requests such postponement or adjournment in accordance with the Merger Agreement; and (4) the approval of any other proposal considered and voted upon by the Company Stockholders at any Company Stockholder Meeting (or by written consent) necessary or desirable for the consummation of the Merger and the other contemplated transactions, and (ii) against (1) any proposal, action or agreement that would reasonably be expected to result in a breach of any covenant, representation or warranty or other obligation or agreement of the Issuer contained in the Merger Agreement or that would reasonably be expected to result in any condition set forth in the Merger Agreement not being satisfied or not being fulfilled prior to the termination of the Voting Agreement, (2) any Acquisition Proposal (as defined in the Merger Agreement), or any other proposal made in opposition to, in competition with, or inconsistent with, the Merger Agreement, the Merger or the transactions contemplated by the Merger Agreement, (3) any reorganization, recapitalization, dissolution, liquidation, winding up or similar extraordinary transaction involving the Issuer (except as contemplated by the Merger Agreement) and (4) any other action, agreement or proposal which would reasonably be expected to prevent or materially impede or materially delay the consummation of the Merger or any of the transactions contemplated by the Merger Agreement.
In addition, under the Voting Agreement, the Baupost Stockholders agree that, during the term of the Voting Agreement, they will not, except to their affiliates who execute a voting agreement on the same terms as the Voting Agreement or as expressly contemplated in the Merger Agreement or Voting Agreement, (i) tender any Voting Agreement Shares into any tender or exchange offer, (ii) Transfer (as defined below) or enter into any contract or other arrangement with respect to the Transfer of the Voting Agreement Shares or (iii) grant any proxies or powers of attorney, deposit any Voting Agreement Shares into a voting trust or enter into a voting agreement. After the approval and adoption of the Merger Agreement by the Company Stockholders, the Baupost Stockholders may Transfer the Voting Agreement Shares with no requirement for the transferee to sign a voting or support agreement and after which such shares shall cease to be Voting Agreement Shares. For the purpose of the Voting Agreement, “Transfer” means (i) any direct or indirect sale, assignment, encumbrance, pledge, gift, hedge, hypothecation, disposition, loan or other transfer, or entry into any option or other contract, arrangement or understanding with respect to any sale, assignment, encumbrance, pledge, gift, hedge, hypothecation, disposition, loan or other transfer (whether by merger, consolidation, division, conversion, operation of law or otherwise), of any Voting Agreement Shares or beneficial ownership or voting power therein (including by operation of law) (in each case other than the Voting Agreement), (ii) the deposit of such Voting Agreement Shares into a voting trust, the entry into a voting agreement or arrangement (other than the Voting Agreement) with respect to such Voting Agreement Shares or the grant of any proxy or power of attorney with respect to such Voting Agreement Shares or (iii) any contract or commitment (whether or not in writing) to take any of the actions referred to in the foregoing clauses (i) or (ii) above.
The Voting Agreement provides that it shall terminate upon the earliest to occur of (i) the valid termination of the Merger Agreement in accordance with its terms, (ii) the date of any material modification, waiver or amendment to any provision of the Merger Agreement that reduces the amount, changes the form or otherwise adversely affects the consideration payable to the Baupost Stockholders pursuant to the Merger Agreement as in effect on the date of the Voting Agreement, (iii) the effective time of the Merger or (iv) May 6, 2024.
The preceding description of the Voting Agreement does not contain a complete description of such agreement and is qualified in its entirety by reference to the full text of the Voting Agreement, which is filed as an exhibit hereto and incorporated herein by reference.
The Reporting Persons intend to review their investment in the Issuer on a continuing basis and expect to engage in discussions with management and the board of directors of the Issuer, other holders of Company Stock, financing sources and other relevant parties, including other industry participants (including companies in which the Reporting Persons may have an investment), concerning the business, operations, governance, strategy, capitalization, ownership and future plans of the Issuer and the management and board composition of the Issuer or commercial or strategic transactions with, or relating, to the Issuer. The Reporting Persons may change their plans or proposals in the future. Depending on various factors including, without limitation, the Issuer’s financial position, strategic direction, business and prospects, anticipated future developments, existing and anticipated market conditions from time to time, actions taken by the management and board of directors of the Issuer, price levels of the Company Stock, general economic conditions and regulatory matters, the Reporting Persons may in the future take such actions with respect to their investment in the Issuer as they deem appropriate including, without limitation, purchasing additional Company Stock or other securities of the Issuer, selling some or all of their Company Stock or engaging in short selling of or any hedging or similar transaction with respect to the Company Stock, in each case to the extent permitted under applicable law and the Voting Agreement, or engage, discuss, participate in, negotiate or approve a transaction (including commercial or strategic transactions with, or relating to, the Issuer) with the purpose or effect of changing or influencing the control of the Issuer, including by entering into one or more confidentiality agreements, standstill agreements, voting or support agreements or other similar agreements with the purpose or effect of facilitating such a transaction, in each case to the extent permitted by the Voting Agreement. Any such transactions, if they occur at all, may take place at any time and without prior notice.
The Reporting Persons reserve the right to change their intentions with respect to any or all of the matters referred to in this Item 4. |
