Item 2.01. Completion of Acquisition or Disposition of Assets.
On October 26, 2023 (the “Closing Date”), Shift4 Payments, Inc., a Delaware corporation (the “Company” or “Shift4”) completed its previously announced acquisition (the “Acquisition”) of Credorax, Inc. a company incorporated under the laws of the British Virgin Islands and d/b/a Finaro (“Finaro”), pursuant to an agreement and plan of merger dated as of March 1, 2022, and as amended by letter agreements dated March 1, 2023 and July 30, 2023 (the “Merger Agreement”) with Finaro alongside its wholly owned subsidiaries formed for the purposes of the acquisition (collectively, the “Shift4 Subs”) and (iii) certain sellers named in the Merger Agreement (the “Sellers”). The Company, Shift4 LLC, Shift4 Subs are hereinafter referred to as “Buyer Group”.
The consideration for the Acquisition consisted of (i) payment by the Buyer Group of $200.0 million in cash and $325.0 million in Class A common stock with customary lock-up provisions for up to 12 months following completion of the Acquisition; (ii) additional consideration for the Merger of $50.0 million in Class A common stock of the Company, with customary lock-up provisions for up to 12 months following completion of the Acquisition paid by the Buyer Group and further distributed contingent upon the achievement of certain milestones as specified in the Merger Agreement; and (iii) $25.0 million in employee incentives paid by the Buyer Group in the form of restricted stock units in the Company, issued to the relevant employees under the Shift4 Payments, Inc. Amended and Restated 2020 Stock Incentive Plan.
The Merger Agreement contains customary representations and warranties by Finaro and the Buyer Group. The Merger Agreement contains indemnification obligations of the Sellers and the Buyer Group arising from breach of any fundamental representation, certain specified matters or any fraud or willful breach by the Sellers. The breach of business warranties provided by Finaro is covered through a representation and warranty insurance policy of the Buyer Group. The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated herein by reference.
Item 3.02. Unregistered Sales of Equity Securities.
The information set forth in Item 2.01 above is incorporated by reference into this Item 3.02.
As described in Item 2.01 of this Current Report on Form 8-K, (i) on the Closing Date, the Company offered and sold $325.0 million in Class A common stock, in each case, in a private placement in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Company also agreed to issue additional shares of Class A common stock as the equity component of earnout consideration for the Merger in an amount up to $50.0 million. None of the securities have been or will be registered under the Securities Act or may be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Company intends to file a shelf registration statement for the resale of a portion of the aforementioned securities. This filing does not constitute an offer to sell or the solicitation of an offer to buy any securities.
