Item 1.01 Entry into a Material Definitive Agreement.
On August 1, 2022, PerkinElmer, Inc. (the “Company”) entered into a Master Purchase and Sale Agreement (the “Purchase Agreement”) with Polaris Purchaser, L.P. (the “Purchaser”), a Delaware limited partnership owned by funds managed by affiliates of New Mountain Capital L.L.C. (the “Sponsor”), under which the Company agreed to sell to the Purchaser certain assets and the equity interests of certain entities constituting its Applied, Food and Enterprise Services businesses (the “Business”) (as further defined in the Purchase Agreement), for cash consideration of up to approximately $2.45 billion and the Purchaser’s assumption of certain liabilities relating to the Business (collectively, the “Transaction”). Approximately $2.3 billion of the purchase price will be payable in connection with the closing, subject to certain customary adjustments, which includes $75 million in deferred payments tied to the transfer of the PerkinElmer brand and related trademarks to the Purchaser (which may be completed within 24 months following the date of the closing at the Company’s election). The Purchase Agreement also provides for potential post-closing payments totaling up to $150 million, which are contingent on the exit valuation the Sponsor and its affiliated funds receive on a sale or other capital events related to the Business.
The Purchase Agreement provides that the closing is subject to the satisfaction or waiver of customary closing conditions, including, among other things, (i) the accuracy of each party’s representations and warranties (subject to customary materiality standards), (ii) each party’s compliance in all material respects with pre-closing covenants, (iii) the expiration or termination of waiting periods or receipts of approvals, as applicable, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and certain foreign antitrust and foreign direct investment laws, (iv) the absence of any governmental order preventing the consummation of the Transaction and any legal proceeding brought by a governmental entity that would cause the Transaction to be rescinded, (v) completion of an internal reorganization and certain other specified actions relating to the separation of the Business from the Company’s remaining businesses, (vi) receipt of certain third-party consents and (vii) the delivery of customary closing deliverables, including entry into a transition services agreement, pursuant to which the parties will agree to provide certain services to each other following the closing. The Purchase Agreement also provides that, without the express written consent of the Purchaser, the closing will occur no earlier than December 1, 2022.
The Purchaser has obtained equity commitments from certain funds affiliated with the Sponsor and a debt financing commitment from certain direct lenders. The Purchaser Agreement requires Purchaser to use its reasonable best efforts to arrange and obtain the financing on the terms and conditions described in the equity and debt financing commitments. However, the closing of the Transaction is not conditioned upon the receipt of any financing.
The Purchase Agreement contains customary termination provisions, including the right of the Company and the Purchaser to terminate if the closing has not occurred by May 1, 2023. If the Purchase Agreement is terminated under certain specified circumstances, the Purchaser will be required to pay the Company a reverse termination fee of $75 million (the “Reverse Termination Fee”). Certain funds affiliated with the Sponsor have provided the Company with a limited guarantee in favor of the Company guaranteeing the obligations of the Purchaser to pay the Reverse Termination Fee and certain other payment obligations of the Purchaser under the Purchase Agreement.
The Purchase Agreement provides that, for a period of three years following the closing, the Company, together with its direct and indirect controlled affiliates, will not engage in a business that is competitive with the Business as conducted as of the closing, subject to certain exceptions.
The foregoing description of the Purchase Agreement is qualified in its entirety by reference to the full text of the Purchase Agreement, which is attached as Exhibit 2.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The Purchase Agreement has been attached as an exhibit to provide investors and security holders with information regarding its terms. It is not intended to provide any other factual information about the Company, the Purchaser or Sponsor. The representations, warranties and covenants contained in the Purchase Agreement were made only for the purposes of such agreement and as of specified dates, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as facts and may be subject to standards of materiality applicable to the
