Item 1.01 Entry Into a Material Definitive Agreement.
On September 20, 2021, Procore Technologies, Inc., a Delaware corporation
("Procore"), entered into an Agreement and Plan of Merger (the "Merger
Agreement") by and among Procore, Lucky Strike Merger Sub, Inc., a Delaware
corporation and a wholly-owned subsidiary of Procore ("Merger Sub"), Express
Lien, Inc. (d/b/a Levelset), a Delaware corporation ("Levelset"), and
Shareholder Representative Services LLC, a Colorado limited liability company,
solely as the representative, agent and attorney-in-fact of the Company
Indemnitors (as defined in the Merger Agreement), pursuant to which Merger Sub
will merge with and into Levelset, with Levelset continuing as the surviving
company and as a wholly-owned subsidiary of Procore (the "Merger"). Levelset is
a software company that enables contractors and suppliers to efficiently manage
their lien rights on construction projects, simplifying complex compliance
workflows and payment processes for the industry.
Subject to the terms and conditions of the Merger Agreement, Procore has agreed
to acquire Levelset for a purchase price of approximately $500 million, which
will consist of approximately $425 million in cash, subject to customary
adjustments for working capital, transaction expenses, cash and indebtedness,
and approximately $75 million in Procore common stock (the "Shares"). The number
of Shares issued in the transaction will be determined based on the
volume-weighted average trading price of a share of Procore common stock as
measured over thirty consecutive trading days on the New York Stock Exchange
immediately prior to the consummation of the Merger. If the consummation of the
Merger had occurred on September 20, 2021, the total number of Shares issued in
the Merger would be equal to approximately 820,223. The Shares may be, subject
to the terms and conditions of the Merger Agreement, issued to former interest
holders of Levelset that are accredited investors. Any former interest holders
of Levelset that are not accredited investors will receive cash in lieu of any
Shares that would have otherwise been issuable to such holder.
The Merger Agreement contains customary representations, warranties, covenants
and agreements of Levelset and Procore. The closing of the transactions
contemplated by the Merger Agreement is anticipated to occur in the fourth
quarter of this year and is subject to customary closing conditions, including,
without limitation, the expiration or termination of the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended. The Merger Agreement also provides customary termination rights to each
of the parties and customary indemnification rights to Procore.
The foregoing description of the Merger Agreement and the transactions
contemplated thereby does not purport to be complete and is subject to, and
qualified in its entirety by, the full text of the Merger Agreement, which will
be filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the
quarter ending September 30, 2021.
Item 3.02 Unregistered Sales of Equity Securities.
The information set forth above in Item 1.01 of this Current Report on Form 8-K,
including the issuance of the Shares, is hereby incorporated by reference into
this Item 3.02. The Shares will be issued pursuant to the exemption from the
registration requirements provided in Section 4(a)(2) of the Securities Act of
1933, as amended (the "Securities Act"), for transactions by an issuer not
involving any public offering. Accordingly, the offer and sale of the Shares
pursuant to the Merger Agreement have not been registered under the Securities
Act, and the Shares may not be offered or sold in the United States except
pursuant to an effective registration statement or an applicable exemption from
the registration requirements of the Securities Act and any applicable state
securities laws.
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Item 7.01 Regulation FD Disclosure.
On September 22, 2021, Procore issued a press release announcing the execution
of the Merger Agreement, a copy of which is furnished as Exhibit 99.1.
The information set forth in or incorporated by reference into this Item 7.01,
including Exhibit 99.1, shall not be deemed to be "filed" for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or otherwise subject to the liability of that section, and shall not be
incorporated by reference into any registration statement or other document
filed under the Securities Act, or the Exchange Act, except as shall be
expressly set forth by specific reference in such filing.
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Current Report on Form 8-K, including any exhibit hereto, contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, or the Securities Act, and Section 21E of the
Securities Exchange Act of 1934, as amended, or the Exchange Act, about Procore
and its industry that involve substantial risks and uncertainties. All
statements other than statements of historical fact contained in this Current
Report on Form 8-K, are forward-looking statements of Procore's future operating
results and financial position, its business strategy and plans, market growth
and trends, and objectives for future operations. Forward-looking statements
generally relate to future events or Procore's future financial or operating
performance. In some cases, you can identify forward-looking statements because
they contain words such as "anticipate," "believe," "contemplate," "continue,"
"could," "estimate," "expect," "intend," "may," "plan," "potential," "predict,"
"project," "should," "target," "will," or "would" or the negative of these words
or other similar terms or expressions that concern Procore's expectations,
strategy, plans or intentions. Important risks and uncertainties that could
cause Procore's actual results and financial condition to differ materially from
those indicated in the forward-looking statements include, among others, the
following: (i) risks associated with (a) the possibility that the closing
conditions to the transaction with Levelset may not be satisfied or waived in a
timely manner or at all, including that a governmental entity may prohibit,
delay or refuse to grant a regulatory approval, (b) the failure to complete or
receive the anticipated benefits from the transaction, including due to
Procore's inability to successfully integrate Levelset into its business,
(c) diverting management attention from ongoing business operations, (d) the
commencement or outcome of any legal proceedings that may be instituted against
Procore or Levelset in connection with the proposed transaction and (e) the
effects of the transaction on the combined business, including on operating
costs, customer loss and business disruption; (ii) changes in laws and
regulations applicable to Procore's or Levelset's business model; (iii) changes
in market or industry conditions, regulatory environment and receptivity to
Procore's or Levelset's technology and services; (iv) results of litigation or a
security incident; (v) the loss of one or more of Procore's or Levelset's key
customers or partners; (vi) the impact of COVID-19 on Procore's or Levelset's
business and results of operations; (vii) changes to Procore's or Levelset's
abilities to recruit and retain qualified team members; and (viii) the risks
described in the other filings Procore makes with the Securities and Exchange
Commission from time to time, including the risks described under the heading
"Risk Factors" in Procore's Final Prospectus dated May 19, 2021 and its
Quarterly Report on Form 10-Q, which should be read in conjunction with its
financial results and forward-looking statements. Moreover, Procore operates in
a very competitive and rapidly changing environment. New risks and uncertainties
emerge from time to time, and it is not possible for Procore to predict all
risks and uncertainties that could have an impact on the forward-looking
statements contained in this Current Report on Form 8-K. The results, events,
and circumstances reflected in the forward-looking statements may not be
achieved or occur, and actual results, events, or circumstances could differ
materially from those described in the forward-looking statements.
All forward-looking statements made in this Current Report on Form 8-K or any
exhibit hereto relate only to events as of the date on which the statements are
made. Procore undertakes no obligation to update any forward-looking statements
made in this Current Report on Form 8-K or any exhibit hereto to reflect events
or circumstances after the date of this Current Report on Form 8-K or to reflect
new information or the occurrence of unanticipated events, except as required by
law. Procore may not actually achieve the plans, intentions, or expectations
disclosed in its forward-looking statements, and you should not place undue
reliance on its forward-looking statements. Procore's forward-looking statements
do not reflect the potential impact of any future acquisitions, mergers,
dispositions, joint ventures, or investments.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit
Number Description
99.1 Procore Technologies, Inc. Press Release, dated as of September 22,
2021.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
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