Item 8.01 Other Events.
As previously disclosed, on
While the Company believes that the disclosures set forth in the Proxy Statement comply fully with applicable law, the Company has determined to voluntarily supplement the Proxy Statement with various disclosures. These disclosures are provided in this Current Report on Form 8-K. Nothing in this Current Report on Form 8-K will be deemed an admission of the legal necessity or materiality under applicable laws of any of the disclosures set forth herein. These disclosures should be read in connection with the Proxy Statement, which should be read in its entirety. Defined terms used but not defined herein have the meanings set forth in the Proxy Statement. Without agreeing in any way that the disclosures below are material or otherwise required by law, the Company makes the following amended and supplemental disclosures:
SUPPLEMENT TO PROXY STATEMENT
1. The section of the Proxy Statement entitled "The Merger-Background of the
Merger" is hereby supplemented as follows:
A. The fourth sentence of the second paragraph on page 30 (such paragraph
beginning with "OnJanuary 30, 2020 , . . .") is hereby amended and restated to read as follows:
Each non-disclosure agreement contained standstill obligations with a term of 12 months (most of which included a "don't ask, don't waive" standstill provision) that automatically terminate upon the signing of a definitive agreement with a third party for the sale of the Company.
B. The following sentence is hereby inserted immediately preceding the last
sentence of the carryover paragraph on page 41 (such paragraph beginning with
"Also on
As a result of the positive and negative trends noted above, the Company Projections reflected, among other things, lower headcount and revenue growth, lower operating expenses, and modestly higher unlevered free cash flow over the forecast period than did the Original Projections.
2. The section of the Proxy Statement entitled "The Merger-Opinion of Credit
Suisse Securities (USA ) LLC-Selected Companies Analyses" is hereby supplemented as follows:
A. The fourth paragraph on page 49 (such paragraph beginning with "The selected
companies were . . .") is hereby deleted.
B. The word "above" in the first sentence of the fifth paragraph on page 49 (such
paragraph beginning with "For each of the selected companies listed above, . . .") is hereby replaced with the word "below."
C. The following sentence and table are hereby inserted immediately preceding the
first paragraph on page 50 (such paragraph beginning with "Taking into account . . ."): 1
The selected companies and the applicable multiples were:
Enterprise Value / Enterprise Value / 2022E Revenue 2023E Revenue SS&C Technologies Holdings, Inc. 4.6x 4.4x Tyler Technologies, Inc. 9.1x 8.3x Guidewire Software, Inc. 8.4x 7.5x PowerSchool Holdings, Inc. 7.5x 6.8x Everbridge, Inc. 5.2x 4.4x Evolv Technologies Holdings, Inc. 3.6x 1.7x Fathom Holdings Inc. 0.2x 0.2x
3. The section of the Proxy Statement entitled "The Merger-Opinion of Credit
Suisse Securities (USA ) LLC-Selected Transactions Analysis" is hereby supplemented as follows:
A. The third paragraph and the table that follows on page 50 (such paragraph
beginning with "The selected transactions were . . .") are hereby deleted.
B. The word "above" in the first sentence of the first paragraph on page 51 (such
paragraph beginning with "For each of the selected transactions listed above, . . .") is hereby replaced with the word "below."
C. The following sentence and table are hereby inserted immediately preceding the
second paragraph on page 51 (such paragraph beginning with "Taking into account . . ."):
The selected transactions and the applicable multiples were:
Enterprise Value / Announced Acquiror Target LTM Revenue Houghton Mifflin Harcourt 02 /2022 Veritas Capital Co. 2.5x 02 /2022 HelpSystems Tripwire 3.3x SS&C Technologies Holdings, 12 /2021 Inc. Blue Prism Group Plc 6.8x Clearlake Capital Group, 11 /2021 L.P. Quest Software 4.9x 08 /2021 mdf commerce inc. Periscope Holdings, Inc. 7.2x Science Applications 06 /2021 International Corp. Halfaker and Associates, LLC 2.5x 05 /2021 Absolute Software Corp. NetMotion Software, Inc. 5.7x 02 /2021 Tyler Technologies, Inc. NIC, Inc. 4.5x Veritas Capital and Evergreen Coast Capital 02 /2021 Corp. Cubic Corp. 2.1x 10 /2020 Francisco Partners Forcepoint 2.1x DXC - U.S. State and Local Health and Human Services 03 /2020 Veritas Capital business 3.5x Science Applications 02 /2020 International Corp. Unisys Federal 1.7x 12 /2019 Thoma Bravo Instructure 7.4x 11 /2019 Workday, Inc. Scout RFP 14.4x 10 /2019 Thoma Bravo Sophos 5.4x 09 /2019 Vista Equity Partners Acquia 5.0x 08 /2019 Perspecta Inc. Knight Point Systems, LLC 1.7x 04 /2019 Coupa Software Exari 7.3x Science Applications 09 /2018 International Corp. Engility Holdings, Inc. 1.3x 03 /2018 Inovalon ABILITY Network 8.6x 02 /2018 R1 RCM Inc. Intermedix Corp. 2.4x 01 /2018 On Assignment, Inc. ECS Federal, LLC 1.3x 2
4. The section of the Proxy Statement entitled "The Merger-Opinion of Credit
Suisse Securities (USA ) LLC-Discounted Cash Flow Analysis" is hereby supplemented as follows:
A. The second sentence of the third paragraph on page 51 (such paragraph
beginning with "Credit Suisse performed . . .") is hereby amended and restated to read as follows:
Credit Suisse applied, based on its judgment and experience, a range of terminal
value multiples of 3.0x to 4.0x to the Company's estimated revenue for year
ended
5. The section of the Proxy Statement entitled "The Merger-Opinion of Credit
Suisse Securities (USA ) LLC-Certain Additional Information" is hereby supplemented by amending and restating the second bullet on page 51 (such bullet beginning with "price targets . . .") of the Proxy Statement as follows:
· price targets of three publicly available
Company common stock, which indicated a low to high target stock price range for the Company common stock of$8.00 to$10.00 per share (with a mean and median stock price target of$9.00 ).
6. The section of the Proxy Statement entitled "The Merger-Certain Prospective
Financial Information" is hereby supplemented as follows:
A. The heading "Certain Prospective Financial Information" on page 52 of the
Proxy Statement and the cross-references to such heading in the Table Contents and elsewhere in the Proxy Statement are hereby replaced with "Certain Prospective and Other Unaudited Financial Information."
B. The first sentence of the second paragraph on page 52 of the Proxy Statement
is hereby amended and restated to read as follows (it being understood that the only changes to such sentence are the inclusion of the two parentheticals noted below):
The Company Projections assumed that annual revenue growth rates would accelerate from 27% average annual revenue growth between 2019 and 2021 to 39% in 2023 (as compared to 51% in 2023 for the Original Projections) as a result of investment in additional sales and marketing resources combined with improving market conditions and that annual revenue growth rates between 2024 and 2026 would moderate to an average of approximately 26% (as compared to 37% for the Original Projections).
C. The following paragraph is hereby inserted immediately following the carryover
paragraph on page 53 (such paragraph beginning with "The table below presents . . ."):
The Company also provided to the
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7. The section of the Proxy Statement entitled "The Merger-Certain Prospective
Financial Information-Company Projections" is hereby supplemented as follows:
A. The table on page 53 is hereby replaced with the following table (it being
understood that the only changes to the previous table are the inclusion of
the projected financial data for Adjusted gross profit and Capital
expenditures): Fiscal Year Ending December 31, In millions (1) 2022 (2) 2023 2024 2025 2026 Revenue$ 71 $ 99 $ 127 $ 160 $ 200 Adjusted gross profit (3)$ 46 $ 65 $ 86 $ 110 $ 139 Adjusted operating (loss) income (4)$ (13 ) $ (7 ) $ 1 $ 12 $ 25 Capital expenditures$ 0 $ 2 $ 1 $ 1 $ 2 Unlevered free cash flow (5)$ (12 ) $ (20 ) $ (13 ) $ (6 ) -
B. Footnote 2 on page 54 is hereby amended and restated to read as follows:
(2) For the nine months ending
gross profit, Adjusted operating (loss) income, Capital expenditures and Unlevered free cash flow in the Company Projections were approximately$55 million ,$36 million , ($10 million ),$0 million and ($7 million ), respectively.
C. The following Footnote 3 is hereby inserted immediately following Footnote 2
on page 54:
(3) Adjusted gross profit, a non-GAAP measure, is defined as Revenue, less Cost
of goods sold, adjusted to exclude the effect of stock-based compensation expense.
D. Footnotes 3 and 4 on page 54 are hereby renumbered as Footnotes 4 and 5,
respectively, and the clause ", a non-GAAP measure," is hereby inserted immediately following (i) the words "Adjusted operating (loss) income" in the renumbered Footnote 4 and (ii) the words "Unlevered free cash flow" in the first sentence of the renumbered Footnote 5. * * * * *
Additional Information and Where to Find It
In connection with the proposed merger, the Company filed on
Participants in the Solicitation
The Company, its directors and certain executive officers may be deemed to be
participants in the solicitation of proxies from shareholders in connection with
the merger. Additional information regarding such participants, including their
direct or indirect interests, by security holdings or otherwise, is included in
the Proxy Statement and will be included in other relevant documents to be filed
with the
4 Forward-Looking Statements
This filing contains forward-looking statements that involve risks and
uncertainties, including statements regarding the merger, the special meeting of
shareholders to consider the merger, the solicitation of proxies to approve the
merger, and the closing of the merger. If any of these risks or uncertainties
materialize, or if any of the Company's assumptions prove incorrect, the
Company's actual results could differ materially from the results expressed or
implied by these forward-looking statements. Additional risks and uncertainties
include those associated with the possibility that the conditions to the closing
of the merger are not satisfied, including the risk that required approvals from
the Company's shareholders for the merger or required regulatory approvals to
consummate the merger are not obtained; potential litigation relating to the
merger; uncertainties as to the timing of the consummation of the merger; the
ability of each party to consummate the merger; possible disruption related to
the merger to the Company's current plans and operations, including through the
loss of customers and employees; and other risks and uncertainties detailed in
the periodic reports that the Company files with the
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