Item 1.01. Entry into a Material Definitive Agreement.
On
• any and all of the issued and outstanding shares of the Company Common Stock (each, a "Share" and collectively, the "Shares"), at a price per Share of$15.00 (such amount, the "ShareOffer Price "), payable net to the seller in cash, without interest, subject to any withholding of taxes required by applicable law, on the terms and subject to the conditions set forth in the Merger Agreement (the "Share Offer"); and • any and all of the issued and outstanding shares of the Company Preferred Stock, at a price per share of Company Preferred Stock equal to (x) 150% of the Liquidation Preference (as defined in the Merger Agreement) per share, plus (y) Accrued and Unpaid Dividends (as defined in the Merger Agreement) payable in respect of such Company Preferred Stock, in the case of clauses (x) and (y), calculated as of and including the Expiration Date (as defined in the Merger Agreement), pursuant to the terms of the Certificate of Designations (as defined in the Merger Agreement) (such amount, the "Preferred ShareOffer Price " and, together with the ShareOffer Price , the "Offer Prices"), payable net to the seller in cash, without interest, subject to any withholding of taxes required by applicable law, on the terms and subject to the conditions set forth in this Agreement (the "Preferred Share Offer" and, together with the Share Offer, the "Offer").
Following the acceptance for payment of Shares in the Offer at the Effective
Time (as defined in the Merger Agreement), Merger Sub will be merged with and
into the Company pursuant to Section 251(h) of the General Corporation Law of
the
• each share of the Company Common Stock issued and outstanding immediately prior to the Effective Time, other than Company Common Stock to be cancelled under the Merger Agreement or Dissenting Shares (as defined in the Merger Agreement), will be converted into the right to receive the ShareOffer Price in cash, without interest (the "Merger Consideration"); • each share of Company Preferred Stock issued and outstanding immediately prior to the Effective Time, other than Dissenting Shares, will be converted into the right to receive an amount per share equal to the Preferred ShareOffer Price in cash, without interest (the "Preferred Merger Consideration"); • all outstanding shares of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time will be converted into an aggregate of 1,000 shares of newly and validly issued, fully paid and non-assessable shares of common stock of the surviving corporation; • each option to purchase shares of Company Common Stock (whether vested or unvested) (each a "Company Option") that is outstanding immediately prior to the Effective Time will automatically be cancelled and be converted into the right to receive (without interest) an amount in cash equal to the product of (x) the total number of Company Common Stock underlying the Company Option multiplied by (y) the excess,
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if any, of the Merger Consideration over the exercise price of such Company Option; provided that any such Company Option with respect to which the exercise price subject thereto is equal to or greater than the Merger Consideration will be canceled for no consideration;
• each award of Company restricted stock units that is subject solely to service-based vesting conditions (including any Company restricted stock units that were subject, in whole or in part, to performance-based vesting conditions as of the applicable grant date, but that are solely subject to service-based vesting conditions as of immediately prior to the Effective Time) ("Company RSUs") and that is outstanding immediately prior to the Effective Time shall become fully vested and shall automatically be cancelled and converted into the right to receive (without interest) an amount in cash equal to (x) the total number of Shares underlying such award of Company RSUs as of immediately prior to the Effective Time, multiplied by (y) the Merger Consideration; and • each award of Company restricted stock units other than those described in the immediately preceding clause will be cancelled for no consideration prior to the Effective Time in accordance with their terms.
The Board has (i) determined that the transactions contemplated by the Merger Agreement, including the Offer and the Merger, are advisable, fair to and in the best interests of the Company and its stockholders, (ii) approved, adopted and declared advisable the Merger Agreement and the transactions contemplated hereby, including the Offer and the Merger, (iii) determined that the Merger shall be effected as soon as practicable following the Acceptance Time (as defined in the Merger Agreement) without a vote of the Company's stockholders pursuant to Section 251(h) of the DGCL, and (iv) resolved to recommend that the Company's stockholders accept the Offer and tender their Shares or shares of Company Preferred Stock, as applicable, to Merger Sub in response to the Offer.
Assuming the satisfaction of the conditions set forth in the Merger Agreement,
the Company expects the Offer to commence in
The Offer is subject to various conditions, including (i) that a majority of the voting power of the Company Common Stock and Company Preferred Stock (on an as-converted basis) be validly tendered; (ii) the absence of any order, injunction or law prohibiting the Offer or the closing of the Merger; (iii) (a) the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (b) the expiration of any waiting period under other applicable competition laws; and (iv) the accuracy of the representations and warranties contained in the Merger Agreement, subject to customary materiality qualifications, and compliance with the covenants and agreements contained in the Merger Agreement as of the closing of the Merger. In addition, the obligation of Parent and Merger Sub to commence the Offer and consummate the Merger is subject to the absence, since the date of the Merger Agreement, of a Company Material Adverse Effect (as defined in the Merger Agreement). The closing of the Merger is not subject to a financing condition.
The Merger Agreement contains customary representations, warranties and covenants, including, among others, covenants by the Company to conduct its business in the ordinary course between the date of the Merger Agreement and the closing of the Merger, not to engage in certain kinds of material transactions during such period, to obtain regulatory approvals and, subject to certain customary exceptions, for the Board to recommend that the stockholders tender their shares in the Offer. The Merger Agreement also contains customary representations, warranties and covenants of Parent and Merger Sub.
Pursuant to the Merger Agreement, the Company is subject to customary "no shop" restrictions prohibiting the Company and its representatives from soliciting Acquisition Proposals (as defined in the Merger Agreement) from third parties or providing information to or participating in any discussions or negotiations with third parties regarding Acquisition Proposals, subject to certain exceptions set forth in the Merger Agreement as described below.
Prior to the Acceptance Time, the Board may effect a Change of Board Recommendation (as defined in the Merger Agreement) if the Company has received a bona fide written Acquisition Proposal (other than as a result of a breach of Section 5.3 of the Merger Agreement) that the Board determines in good faith, after consultation with its financial advisors and outside legal counsel, taking into account the factors the Board considers in good faith to be appropriate (including the conditionality, timing and likelihood of consummation of such proposals), would be more favorable from a financial point of view to the stockholders of the Company than the Merger (taking into account any adjustments to the Merger Agreement proposed by Parent as described below) (a "Superior Proposal"). In addition, prior to the Acceptance Time, the Board may also, subject to requirements specified in the Merger Agreement, terminate the Merger Agreement in response to a Superior Proposal. Prior to taking these actions, the
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Company must provide Parent with at least three business days advance written notice (the "Notice Period") of the Company's intention to take such action, which notice shall include a copy of such Superior Proposal and all related documentation. To the extent Parent requests, the Company agreed to direct its representatives to negotiate with Parent in good faith during the Notice Period regarding any amendments or modifications to the Merger Agreement proposed in writing by Parent and intended to cause the relevant Acquisition Proposal to no longer constitute a Superior Proposal. Following the Notice Period, and taking into account any amendments or modifications proposed by Parent to the terms of the Merger Agreement, the Board may terminate the Merger Agreement if it determines in good faith, after consultation with its financial advisors and outside legal counsel, that such Acquisition Proposal would continue to constitute a Superior Proposal if such proposed amendments or modifications were to be given effect. Subject to similar provisions and requirements in the Merger Agreement, including a three business day notice period, the Board may also effect a Change of Board Recommendation with respect to an Intervening Event (as defined in the Merger Agreement).
The Merger Agreement contains certain termination rights for both the Company
and Parent. If the Merger Agreement is terminated in connection with the
Company's entry into an agreement with respect to a Superior Proposal or the
Board effecting a Change of Board Recommendation, the Company will be required
to pay to Parent a termination fee of
In addition to the foregoing termination rights, and subject to certain
limitations, the Company or Parent may terminate the Merger Agreement if the
Merger is not consummated by
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Agreement generally requires that the shareholders party thereto validly tender all of her or its shares after commencement of the Tender Offer and to vote against any action, agreement or transaction involving the Company that can impede, interfere with or prevent the consummation of the Transaction. The Support Agreement will terminate upon the earliest to occur of (a) the termination of the Merger Agreement in accordance with its terms, (b) the delivery of written notice of termination by the stockholders to Parent and Merger Sub following any amendment, modification, change or waiver to any provision of the Merger Agreement that decreases the amount or changes the form of the Cash Consideration (other than adjustments in accordance with the terms of the Merger Agreement), (c) the Company's Board or any authorized committee thereof has effected a Change of Board Recommendation in accordance with the terms and conditions of the Merger Agreement and (d) the consummation of the Merger. The foregoing description of the Support Agreements does not purport to be complete and is qualified in its entirety by the full text of the Support Agreements, a form of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein. Item 8.01. Other Events OnDecember 20, 2019 , the Company and IAC issued a joint press release announcing the execution of the Merger Agreement, a copy of which is attached hereto as Exhibit 99.1. The information included in this Item 8.01 and Exhibit 99.1 are not deemed to be "filed" for purposes of Section 18 of the Exchange Act, nor shall this Item 8.01 and Exhibit 99.1 be incorporated by reference into the Company's filings under the Securities Act of 1933, as amended, or the Exchange Act of 1934, as amended, except as expressly set forth by specific reference in such future filing. Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit Number Exhibit Description Agreement and Plan of Merger by and among IAC/InteractiveCorp,Buzz Merger Sub Inc. andCare.com, Inc. , dated as ofDecember 20 , 2.1 2019 Form of Tender and Support Agreement, dated as ofDecember 20 , 10.1 2019, entered into with the parties named on Schedule A thereto Joint press release issued byCare.com, Inc. and 99.1 IAC/InterActiveCorp, datedDecember 20, 2019
Additional Information and Where to Find It
The Tender Offer referenced in this communication has not yet commenced. This
communication is for informational purposes only and is neither an offer to
purchase nor a solicitation of an offer to sell
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documents filed with theSEC byCare.com will be available free of charge onCare.com's internet website at www.care.com or by contactingCare.com's Investor Relations Department at +1 (781) 795-7244. Copies of the documents filed with theSEC by IAC/InterActiveCorp will be available free of charge on IAC/InterActiveCorp's internet website at www.iac.com/investor-relations/overview or by contacting Parent's Investor Relations Department at +1 (212) 314-7400. In addition to the Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as well as the Solicitation/Recommendation Statement, Parent andCare.com each file annual, quarterly and current reports and other information with theSEC . Parent's andCare.com's filings with theSEC are available to the public on theSEC's website at http://www.sec.gov. Note on Forward-Looking Statements Certain statements either contained in or incorporated by reference into this document are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, but not limited to, statements regarding the combined companies' plans following, and the expected completion of, the proposed acquisition. These forward-looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements and generally include statements that are predictive in nature and depend upon or refer to future events or conditions. Risks and uncertainties include the ability ofCare.com and Parent to complete the transactions contemplated by the Merger Agreement, including the parties' abilities to satisfy the conditions to the consummation of the proposed acquisition; the possibility of any termination of the Merger Agreement; the timing of the Tender Offer and the subsequent Merger; uncertainties as to how many ofCare.com's stockholders will tender their shares of common stock in the Tender Offer; the possibility that various other conditions to the consummation of the tender offer or the subsequent merger may not be satisfied or waived, including that a governmental entity may prohibit, delay or refuse to grant approval for the consummation of the acquisition; other uncertainties pertaining to the business ofCare.com ; legislative and regulatory activity and oversight; the continuing global economic uncertainty and other risks detailed inCare.com's public filings with theSEC from time to time, includingCare.com's most recent Annual Report on Form 10-K for the year endedDecember 31, 2019 , Quarterly Reports on Form 10-Q and its subsequently filedSEC reports, each as filed with theSEC , which contain and identify important factors that could cause actual results to differ materially from those contained in the forward-looking statements. The reader is cautioned not to unduly rely on these forward-looking statements.Care.com expressly disclaims any intent or obligation to update or revise publicly these forward-looking statements except as required by law.
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