UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Schedule TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(1)
of the Securities Exchange Act of 1934
Essendant Inc.
(Name of Subject Company (Issuer))
Egg Merger Sub Inc.
Egg Parent Inc.
Staples, Inc.
(Names of Filing Persons (Offerors))
Common Stock, $0.10 par value
(Title of Class of Securities)
296689102
(CUSIP Number of Class of Securities)
Cristina Gonzales
Chief Legal Officer
Staples, Inc.
500 Staples Drive
Framingham, MA 01702
(508)253-1845
(Name, Address and Telephone Numbers of Person Authorized to Receive Notices and Communications on Behalf of Filing Persons)
With copies to:
Sean D. Rodgers, P.C.
Laura Sullivan
Kirkland & Ellis LLP
601 Lexington Avenue
New York, New York 10022
(212) 446-4600
CALCULATION OF FILING FEE
| Transaction Valuation(1) | Amount of Filing Fee(2) | |
$497,938,675.20 | $61,993.37 |
| (1) | Calculated solely for purposes of determining the filing fee. The calculation assumes the purchase of 37,644,198 shares of voting common stock, par value $0.10 per share, at an offer price of $12.80 per share. The transaction value also includes (i) 474,738 shares issuable pursuant to outstanding Company restricted stock units, multiplied by the offer price of $12.80 per share, (ii) 156,250 shares issuable pursuant to Company performance units, multiplied by the offer price of $12.80 per share, and (iii) 626,273 shares issuable pursuant to outstanding Company performance stock units assuming satisfaction of any performance-based vesting criteria at target levels, multiplied by the offer price of $12.80 per share. 113,228 shares issuable pursuant to outstanding stock option grants have been excluded from the calculation because the weighted average exercise price of those options exceeds the offer price of $12.80 per share. The calculation of the filing fee is based on information provided by Essendant Inc. as of the close of business on September 5, 2018. |
| (2) | The amount of the filing fee was calculated in accordance with Rule0-11 of the Securities Exchange Act of 1934, as amended, and Fee Rate Advisory #1 for fiscal year 2018, issued August 24, 2017, by multiplying the transaction value by 0.0001245. |
| ☐ | Check the box if any part of the fee is offset as provided by Rule0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing. |
Amount Previously Paid: N/A | Filing Party: N/A | |
Form of Registration No.: N/A | Date Filed: N/A |
| ☐ | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
Check the appropriate boxes below to designate any transactions to which the statement relates:
| ☒ | Third-party tender offer subject to Rule14d-1. |
| ☐ | Issuer tender offer subject to Rule13e-4. |
| ☐ | Going-private transaction subject to Rule13e-3. |
| ☐ | Amendment to Schedule 13D under Rule13d-2. |
Check the following box if the filing is a final amendment reporting the results of the tender offer. ☐
If applicable, check the appropriate box(es) below to designate the appropriate rule provision(s) relied upon:
| ☐ | Rule13e-4(i) (Cross-Border Issuer Tender Offer) |
| ☐ | Rule14d-1(d) (Cross-Border Third-Party Tender Offer) |
This Tender Offer Statement on Schedule TO (together with any amendments and supplements hereto, this “Schedule TO”) is being filed by (i) Egg Parent Inc., a Delaware corporation (“Parent”), (ii) Egg Merger Sub Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Purchaser”), and (iii) Staples, Inc., a Delaware corporation and an affiliate of Parent and Purchaser (“Staples”). This Schedule TO relates to the tender offer for all of the outstanding shares of common stock, par value $0.10 per share (the “Shares”) of Essendant Inc., a Delaware corporation (the “Company”), at a price of $12.80 per Share, net to the seller in cash, subject to reduction for any applicable withholding taxes in respect thereof, without interest (the “Offer Price”), upon the terms and conditions set forth in the offer to purchase, dated September 24, 2018 (the “Offer to Purchase”), a copy of which is attached as Exhibit (a)(1)(A), and in the related letter of transmittal (the “Letter of Transmittal”), a copy of which is attached as
Exhibit (a)(1)(B), which, together with any amendments or supplements, collectively constitute the “Offer.”
All the information set forth in the Offer to Purchase is incorporated by reference herein in response to Items 1 through 9 and Item 11 in this Schedule TO, and is supplemented by the information specifically provided in this Schedule TO.
Item 1. Summary Term Sheet.
The information set forth in the Offer to Purchase under the caption SUMMARY TERM SHEET is incorporated herein by reference.
Item 2. Subject Company Information.
(a) Name and Address. The name, address, and telephone number of the subject company’s principal executive offices are as follows:
Essendant Inc.
One Parkway North Blvd., Suite 100
Deerfield, Illinois 60015
(847)627-7000
(b) Securities. This Schedule TO relates to the Offer by Purchaser to purchase all issued and outstanding Shares. As of the close of business on September 5, 2018, there were 37,644,198 Shares issued and outstanding, 113,228 Shares issuable pursuant to outstanding stock option grants, 474,738 Shares issuable pursuant to outstanding Company restricted stock units, 156,250 Shares issuable pursuant to outstanding Company performance units and 626,273 Shares issuable pursuant to outstanding Company performance stock units assuming satisfaction of any performance-based vesting criteria at target levels.
(c) Trading Market and Price. The information set forth under the caption THE TENDER OFFER—Section 6 (“Price Range of Shares; Dividends”) of the Offer to Purchase is incorporated herein by reference.
Item 3. Identity and Background of Filing Person.
(a)-(c) Name and Address; Business and Background of Entities; and Business and Background of Natural Persons. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER—Section 8 (“Certain Information Concerning the Purchasing Parties”) and Schedule I attached thereto
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Item 4. Terms of the Transaction.
(a) Material Terms. The information set forth in the Offer to Purchase is incorporated herein by reference, including the following sections incorporated herein by reference:
THE TENDER OFFER—Section 1 (“Terms of the Offer”)
THE TENDER OFFER—Section 2 (“Acceptance for Payment and Payment for Shares”)
THE TENDER OFFER—Section 3 (“Procedures for Accepting the Offer and Tendering Shares”)
THE TENDER OFFER—Section 4 (“Withdrawal Rights”)
THE TENDER OFFER—Section 5 (“Material United States Federal Income Tax Consequences”)
THE TENDER OFFER—Section 11 (“The Merger Agreement”)
THE TENDER OFFER—Section 12 (“Purpose of the Offer; Plans for the Company”)
THE TENDER OFFER—Section 13 (“Certain Effects of the Offer”)
THE TENDER OFFER—Section 15 (“Certain Conditions of the Offer”)
THE TENDER OFFER—Section 16 (“Certain Legal Matters; Regulatory Approvals”)
THE TENDER OFFER—Section 18 (“Miscellaneous”)
Item 5. Past Contacts, Transactions, Negotiations and Agreements.
(a) Transactions and (b) Significant Corporate Events. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER—Section 6 (“Price Range of Shares; Dividends”)
THE TENDER OFFER—Section 8 (“Certain Information Concerning the Purchasing Parties”)
THE TENDER OFFER—Section 10 (“Background of the Offer; Past Contacts or Negotiations with the Company”)
THE TENDER OFFER—Section 11 (“The Merger Agreement”)
THE TENDER OFFER—Section 12 (“Purpose of the Offer; Plans for the Company”)
Item 6. Purposes of the Transaction and Plans or Proposals.
(a) Purposes. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER—Section 12 (“Purpose of the Offer; Plans for the Company”)
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(c) (1)-(7) Plans. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER—Section 9 (“Source and Amount of Funds”)
THE TENDER OFFER—Section 10 (“Background of the Offer; Past Contacts or Negotiations with the Company”)
THE TENDER OFFER—Section 11 (“The Merger Agreement”)
THE TENDER OFFER—Section 12 (“Purpose of the Offer; Plans for the Company”)
THE TENDER OFFER—Section 13 (“Certain Effects of the Offer”)
THE TENDER OFFER—Section 14 (“Dividends and Distributions”)
Item 7. Source and Amount of Funds or Other Consideration.
(a) Source of Funds. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER—Section 9 (“Source and Amount of Funds”)
THE TENDER OFFER—Section 10 (“Background of the Offer; Past Contacts or Negotiations with the Company”)
THE TENDER OFFER—Section 11 (“The Merger Agreement”)
(b) Conditions. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER—Section 9 (“Source and Amount of Funds”)
THE TENDER OFFER—Section 10 (“Background of the Offer; Past Contacts or Negotiations with the Company”)
THE TENDER OFFER—Section 11 (“The Merger Agreement”)
THE TENDER OFFER—Section 15 (“Certain Conditions of the Offer”)
(d) Borrowed Funds. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER—Section 9 (“Source and Amount of Funds”)
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THE TENDER OFFER—Section 10 (“Background of the Offer; Past Contacts or Negotiations with the Company”)
THE TENDER OFFER—Section 11 (“The Merger Agreement”)
Item 8. Interest in Securities of the Subject Company.
(a) Securities Ownership. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
THE TENDER OFFER—Section 8 (“Certain Information Concerning the Purchasing Parties”) and Schedule I attached thereto
THE TENDER OFFER—Section 10 (“Background of the Offer; Past Contacts or Negotiations with the Company”)
THE TENDER OFFER—Section 12 (“Purpose of the Offer; Plans for the Company”)
(b) Securities Transactions. Not applicable.
Item 9. Persons/Assets, Retained, Employed, Compensated or Used.
(a) Solicitations or Recommendations. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER—Section 3 (“Procedures for Accepting the Offer and Tendering Shares”)
THE TENDER OFFER—Section 10 (“Background of the Offer; Past Contacts or Negotiations with the Company”)
THE TENDER OFFER—Section 17 (“Fees and Expenses”)
Item 10. Financial Statements.
(a)Financial Information. Not applicable.
(b)Pro Forma Information. Not applicable.
Item 11. Additional Information.
(a) Agreements, Regulatory Requirements and Legal Proceedings. The information set forth in the Offer to Purchase under the following captions is incorporated herein by reference:
SUMMARY TERM SHEET
THE TENDER OFFER—Section 10 (“Background of the Offer; Past Contacts or Negotiations with the Company”)
THE TENDER OFFER—Section 11 (“The Merger Agreement”)
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THE TENDER OFFER—Section 12 (“Purpose of the Offer; Plans for the Company”)
THE TENDER OFFER—Section 13 (“Certain Effects of the Offer”)
THE TENDER OFFER—Section 16 (“Certain Legal Matters; Regulatory Approvals”)
(c) Other Material Information. The information set forth in the Offer to Purchase and the Letter of Transmittal is incorporated herein by reference.
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Item 12. Exhibits.
| Exhibit No. | Description | |
| (a)(1)(A) | Offer to Purchase, dated September 24, 2018. | |
| (a)(1)(B) | Form of Letter of Transmittal. | |
| (a)(1)(C) | Form of Notice of Guaranteed Delivery. | |
| (a)(1)(D) | Form of Letter from the Information Agent to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. | |
| (a)(1)(E) | Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. | |
| (a)(1)(F) | Summary Advertisement as published in the Wall Street Journal on September 24, 2018. | |
| (a)(5)(A) | Joint Press Release issued by the Company and Staples, Inc. on September 14, 2018 (incorporated by reference to Exhibit 99.1 to Current Report on Form8-K of the Company filed with the Securities and Exchange Commission on September 17, 2018). | |
| (a)(5)(B) | Joint Press Release issued by the Company and Staples, Inc. on September 24, 2018. | |
| (b)(1) | Debt Commitment Letter, dated September 14, 2018, from Wells Fargo, National Association to Egg Parent Inc. and Egg Merger Sub Inc. | |
| (d)(1) | Agreement and Plan of Merger, dated as of September 14, 2018, by and among Essendant Inc., Egg Parent Inc., Egg Merger Sub Inc. and Staples, Inc. (incorporated by reference to Exhibit 2.1 to Current Report on Form8-K filed by the Company with the Securities and Exchange Commission on September 17, 2018). | |
| (d)(2) | Confidentiality Agreement, dated August 3, 2018, between Essendant Inc. and Staples, Inc. | |
| (g) | None. | |
| (h) | None. | |
Item 13. Information Required by Schedule13E-3.
Not applicable.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.
EGG MERGER SUB INC.
| ||
| By: | /s/ Stefan L. Kaluzny | |
| Name: Stefan L. Kaluzny | ||
Title: President | ||
| Date: September 24, 2018 | ||
EGG PARENT INC.
| ||
| By: | /s/ Stefan L. Kaluzny | |
| Name: Stefan L. Kaluzny | ||
| Title: President | ||
| Date: September 24, 2018 | ||
STAPLES, INC.
| ||
| By: | /s/ John A. Lederer | |
| Name: John A. Lederer | ||
| Title: Executive Chairman | ||
| Date: September 24, 2018 | ||
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