| Item 1.01. | Entry into a Material Definitive Agreement. |
Stock Purchase Agreement
On April 25, 2019, Repligen Corporation (the “Company”) entered into a Stock Purchase Agreement (the “Purchase Agreement”) with C Technologies, Inc., a New Jersey corporation (the “Seller”), and Craig Harrison, an individual and the sole stockholder of the Seller (the “Stockholder”, and together with the Seller, the “Seller Parties”). Pursuant to the Purchase Agreement, the Company will purchase from the Stockholder all of the issued and outstanding capital stock of the Seller (the “Share Purchase”) for an aggregate purchase price of $240 million.
The aggregate purchase price consists of (i) $192 million in cash (the “Cash Consideration”), and (ii) $48 million in shares of the Company’s common stock (subject to a collar based on the average trailing closing price of the Company’s common stock prior to the execution of the Purchase Agreement). The Cash Consideration is subject to adjustment on (i) cash and working capital adjustments, (ii) the amount of the Seller Parties’ transaction expenses and indebtedness that remain unpaid as of the closing of the Share Purchase (such date, the “Closing”), and (iii) indemnification obligations for certain claims made following the Closing. Approximately $3.4 million of the Cash Consideration will be placed into a third party escrow account against which the Company may make claims for indemnification and purchase price adjustments.
The Purchase Agreement contains customary representations, warranties and covenants of the Company, on one hand, and the Seller and the Stockholder, on the other hand, including, among others, covenants by the Seller Parties with respect to the operations of the businesses of the Seller during the period between execution of the Purchase Agreement and the Closing. The Purchase Agreement also provides that the Stockholder will indemnify the Company following the Closing for breaches of the warranties and covenants of the Seller Parties, as well as certain other matters, subject to certain specified limitations, including, among other things, limitations on the period during which the Company may make certain claims for indemnification and limitations on the amounts for which the Stockholder may be liable. A representations and warranties insurance policy has been purchased by the Company in connection with the Purchase Agreement, under which the Company may seek coverage for breaches of the Seller Parties’ representations and warranties to supplement the escrow fund and the Company’s direct recourse against the Stockholder. The representations and warranties insurance policy is subject to certain customary exclusions and deductibles.
The Closing is conditioned upon, among other things, the expiration of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 laws and other customary closing conditions. The Purchase Agreement provides for limited termination rights, including, among others, by the mutual consent of the Company and the Seller Parties, upon certain breaches of representations, warranties, covenants or agreements, and in the event the Share Purchase has not been consummated before July 24, 2019, subject to the ability to extend under certain circumstances.
The representations, warranties and covenants set forth in the Purchase Agreement were made solely between the parties to the Purchase Agreement and may be subject to important qualifications and limitations agreed to by the parties in connection with negotiating its terms, including being qualified by confidential disclosures exchanged between the parties in connection with the execution of the Purchase Agreement. Moreover, the representations and warranties may be subject to a contractual standard of materiality that may be different from what may be viewed as material to investors or securityholders, or may have been used for the purpose of allocating risk between the parties to the Purchase Agreement rather than establishing matters as facts. Information concerning the subject matter of the representations and warranties may change after the date of the Purchase Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. For the foregoing reasons, no person should rely on the warranties as statements of factual information at the time they were made or otherwise.
Financing Commitment Letter
Concurrently with the execution of the Purchase Agreement, the Company entered into a Commitment Letter (the “Commitment Letter”) with JPMorgan Chase Bank, N.A. (“JPM”), pursuant to which, among other things, JPM, subject to customary conditions, committed to provide, directly or through its affiliates or assignees, to the Company a senior secured 364 day term loan facility of $125 million (the “Bridge Facility”), the proceeds of which may be
